[RT] GEN: INTRUST... Appellate Court rejects challenge by Intrust customers

["charles meyer" <chmeyer@xxxxxxxx>]

----- Original Message ----- 
From: Sent: 
Wednesday, November 28, 2001 9:23 AM
Subject: Appellate Court rejects challenge by Intrust 
customers
<A 
href="http://www.dailysouthtown.com/southtown/dsbiz/281bd1.htm";>http://www.dailysouthtown.com/southtown/dsbiz/281bd1.htm 
Appellate Court rejects challenge by Intrust customers 
             
Wednesday, November 28, 2001 
             By 
Mike Nolan 
             
Business writer 
             
Customers of Independent Trust Corp. who challenged a controversial asset 
liquidation plan 
             
will join thousands of other Intrust customers in losing 8.69 percent of their 
account values. 
             The 
Illinois Appellate Court has rejected appeals by some 1,200 Intrust 
accountholders who 
             had 
fought the assessment, which was approved in March to make up for the $68.1 
million 
             
embezzled from the Orland Park trust company. 
             
Appealing the ruling to the Illinois Supreme Court hasn't been ruled out, said 
Daniel Graham, a 
             
Chicago attorney representing some of the appellants. 
             "We 
are looking at our options," he said. "There will be further discussions among 
the different 
             
appellant groups." 
             The 
appellate court's ruling clears the way for restrictions to be lifted Thursday 
on most of the 
             
17,500 accounts at Intrust. Except in hardship cases, Intrust customers have not 
been able to 
             
withdraw funds since Intrust was forced into receivership in April 2000. 
             Once 
accounts are unfrozen, Millennium Trust Co. LLC is expected to begin processing 
             
requests filed by thousands of Intrust accountholders who want to close their 
accounts and 
             
take their money elsewhere. 
             
Millennium bought Intrust for $2.5 million in December and has promised to 
process a 
             
minimum of 1,500 account closing requests per month. 
             A 
$75 "exit fee" that Millennium plans to assess accounts that are being closed 
will be the 
             
subject of a Dec. 4 hearing before Cook County Circuit Court Judge Sophia Hall, 
who's 
             
overseeing Intrust's receivership. Some Intrust customers argue that Millennium 
isn't allowed to 
             
charge the fee. 
             
Millennium was responsible for collecting the 8.69 percent assessment from about 
12,000 
             
Intrust accounts, including those of customers challenging the liquidation. The 
company 
             
collected the money this summer. 
             
Those funds would be used to cover the shortage in Intrust's cash accounts, from 
which the 
             
missing $68.1 million was allegedly stolen over several years. Intrust customers 
who appealed 
             the 
assessment contended that they had non-cash assets at financial institutions 
other than 
             
Intrust and those funds shouldn't be part of the assessment. 
             The 
appellate court's ruling &#8212; issued late Monday and made available to attorneys 
Tuesday 
             
morning &#8212; included a bit of good news for Intrust investors. 
             The 
court found that Intrust's receiver, accounting and consulting giant 
             
PricewaterhouseCoopers LLP, was wrong to assess receivership fees to cover costs 
unrelated 
             
torunning Intrust's business. The fees were approved by a Cook County judge in 
August 2000. 
             The 
fees raised about $2.1 million and were levied on top of normal trust management 
fees 
             
paid by Intrust customers. PricewaterhouseCoopers said it needed the fee because 
it was 
             
quickly draining Intrust's corporate assets. 
             Some 
of the money raised was used by PricewaterhouseCoopers to pursue a lawsuit 
against 
             
Laurence Capriotti and Jack Hargrove, former Intrust directors who allegedly 
orchestrated the 
             
years-long theft of funds. 
             The 
appellate court said the receivership fee revenue should have been used only to 
cover 
             
expenses associated with administering Intrust's accounts, said Graham, who had 
appealed the 
             
receivership fee 14 months ago. 
             
Attorneys representing PricewaterhouseCoopers said Tuesday they were studying 
that portion 
             of 
the appellate court's ruling to determine its impact. It's possible 
PricewaterhouseCoopers 
             
would have to refund a portion of the $2.1 million. 
             The 
appellate court directed Hall to hold a hearing on the receivership-fee issue. 
             Mike 
Nolan may be reached at mnolan@xxxxxxxxxxxxxxxxxx or (708) 633-5952.   
 






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