Peat Marwick, Credit Unions Settle Suits on Penn Square Bank Audit

Article excerpt

Peat, Marwick, Mitchell & Co. reached settlement agreements with four credit unions Tuesday in lawsuits which sought com bined damages of more than $204 million from the firm for its 1981 audit of Penn Square Bank in Oklahoma City.

During an all-day settlement conference in U.S. District Judge Lee West's chambers, Peat Marwick settled with Wood Products Credit Union in Oregon, Bolling Federal Credit Union in Washington, D.C.,Jax Navy Federal Credit Union, and Pinellas County Teachers Credit Union, both in Florida.

The credit unions all had certificates of deposit with the bank when it failed in July 1982.

Consistent with their posture on prior settlements related to Penn Square Bank, Peat Marwick attorneys declined to comment on the amount.

Eight lawsuits filed in the aftermath of the bank's failure have been consolidated for trial beginning Aug. 18.

Peat Marwick remains a defendant in a $200.47 million lawsuit filed by Professional Asset Management Inc., a California investment consulting firm which had brokered some $2.2 million in certificates of deposit into Penn Square Bank.

The accounting firm was originally a defendant in six of the Penn Square Bank lawsuits. Earlier, Peat Marwick settled out-of-court with the Federal Deposit Insurance Corp. (sought $153.4 million combined damages) and Southwest Corporate Federal Credit Union in Dallas (sought $13.95 million combined damages).

Peat Marwick also remains a defendant in a lawsuit filed in Oklahoma County District Court by Maxwell-Gunter Federal Credit Union in Alabama over a $1 million certificate of deposit it had in Penn Square Bank.

Professional Asset Management was not a party to any settlements Tuesday, according to Erwin Adler, attorney for the company.

Professional Asset Management has sued Peat Marwick, the FDIC, and these former Penn Square Bank officers: Bill P. Jennings, chairman; William G. Patterson, senior executive vice president; C.F. (Tag) Kimberling, director; Carl Swan, director; and Eldon Beller, president.

Attorneys for the FDIC, a defendant in some of the cases, said they did not settle with any of the credit unions Tuesday. …