A Nov. 30 hearing has been scheduled on a request that $7.25 million go to attorneys representing thrift depositors in a class-action suit against the state.
The team of four lawyers from Utah and California negotiated a $100 million settlement with the state that would return to their clients about 90 percent of the money they lost when Utah's thrift and loan industry collapsed in 1986.Notice of the hearing, which will also address the settlement itself, was mailed Thursday to some 15,000 thrift depositors who must vote for or against the settlement.
At least 90 percent of the depositors must vote in favor of the settlement for it to take effect, subject to final approval by 3rd District Judge David S. Young.
After months of negotiations between depositors' attorneys and the governor's office, and several special sessions of the Legislature, lawmakers finally hammered out an agreement that would return about $100 million of the $106 million depositors had in five failed thrifts.
The settlement would also dismiss allegations of fraud and negligence depositors filed against the state and other thrift officials involved in the collapse of Utah's privately insured thrift and loan industry.
"The court has followed this case from the beginning and believes this settlement is not only in the best interests of the depositors but is compelling, and the court urges you to vote for it," said the notice being mailed to depositors.
"The chances of another political settlement must be rated as very slim."
Depositors will take two separate votes on the settlement. The first vote will be to either approve or disapprove the settlement, while the second vote will determine those who don't want any part of the settlement even if it is approved. Ballots will be counted by Nov. 28.
At the Nov. 30 hearing, depositors can tell the court directly how they feel about the settlement and their attorneys' fees, if they notify the court clerk on or before Nov. 21, the notice said.
The depositors' four attorneys - Malcolm A. Misuraca, George M. Haley, Robert L. Stolebarger and Douglas B. Provencher - have requested they be paid $7.25 million for their work. The figure represents 25 percent of the $29 million in cash the state and its insurance carrier contributed to the settlement. The fee would be reduced in relation to the number of depositors who don't participate in the settlement.
Attorneys' fees presented a major stumbling block to the settlement's passage by the Legislature. Lawmakers recommended in their settlement bill that the court cap the fees at $1.5 million.
"The attorneys' fees approved at the final hearing will in no case exceed $7.25 million, and depending on the evidence presented, the court may award a lesser amount as it determines appropriate," the court notice said.
In addition to attorneys' fees being deducted from money depositors receive from the settlement, the court may also reserve funds to pay for plaintiffs' expenses estimated at $950,000, future litigation costs of $1 million against defendants not covered in the settlement, and the cost of administering the settlement.
Although accounting firm Grant Thornton is conducting an ongoing liquidation of thrift assets and has already disbursed $40 million in depositor funds, depositors attorneys requested another firm, Arthur Anderson & Co., handle the settlement vote and disbursements.
A spokeswoman for the depositors' official organization, Depositors of Insured Thrifts, said the group has not been able to locate about 200 depositors. Those depositors who have not been contacted should call the organization's offices at 269-9472, or Arthur Anderson & Co. at 1-800-548-1104 or 1-800-635-5746.