Five insolvent thrift and loans have a slim chance of turning a profit once their assets are sold and expenses paid. But if they do, liquidators of the failed institutions want the money to go to depositors instead of the state.
That's the purpose of SB83, introduced by Sen. Fred W. Finlinson, R-Salt Lake.The legislation would exempt insolvent financial institutions from paying the state's corporate franchise tax. The federal government allows the same exemption.
Roger Brown, local managing partner of the accounting firm Grant Thornton, which is liquidating four of the failed thrifts, said two of the institutions stand a slight chance of netting some income after assets are sold off, although it wouldn't be much.
He explained that the thrifts don't have to pay interest on deposits - the single largest expense of a financial institution - making it possible for a thrift to make a profit after liquidation.