The liquidators of TCI Bank have announced that they are ready to pay out the proceeds of the liquidation of the bank to depositors of record. The Bank has to deal with 4,000 depositors, who will receive only 20 cents for each dollar they had on deposit.
A depositor who had $1,000 on deposit will therefore receive only $200.
In order to receive their payout, depositors must fill out forms to prove they are the owners of the amounts placed on deposit in the bank. Stockholders will not receive any compensation.
The bank was placed into liquidation in April 2010 by the creditors committee, the Financial Service Commission, the National Insurance Board (NIB) and the provisional liquidators who had previously taken control of the bank’s assets.
Those representing the groups placing the bank into liquidation were attorneys Arial Misick, Clayton Greene and Carlos Simons, who were all connected with the last elected government led by the Progressive National Party (PNP). Simons contended for leadership of the party, Greene won the leadership in 2010 and Arial Misick is the brother of both the former, now disgraced Premier Michael Misick and the chairman of the TCI Bank’s board of directors, Washington Misick, who is also a former PNP chief minister.
The NIB may receive all of their last $5 million deposit, which was placed in the bank under a security agreement by then Governor Gordon Wetherell. This will diminish the amounts received by the other depositors. The remaining $17 million the NIB has on deposit will be paid out on the same basis as the other depositors, with the NIB receiving only $3.4 million. Another estimated $2.5 million the NIB invested in corporate stock will be lost.
Shortly after the NIB deposited the last $5 million to prop up the bank’s liquidity, three large depositors not only reportedly removed the entire $5 million but also $500,000 more, forcing the bank into insolvency while they received 100% of their deposits. This has caused many to speculate that one or more members of the board leaked to the large depositors the information that the bank was temporally liquid.
The board included Albray Butterfield Sr., Norman Hamilton, Carlos Simons, Washington Misick and others. Hamilton, who replaced Misick as chairman just as the bank was moving into insolvency, was an adviser to Michael Misick for a short period in 2003 and 2004.
Based on these actions, the ordinary depositors have reportedly lost over $10.5 million from the pool of assets used for distribution under the liquidation process.
Also recently questioned is the decision by the liquidators to remain in the expensive downtown Provo location in facilities owned by the Butterfield family. Reportedly, the bank only recently moved after the liquidators had continued to pay $20,000 dollars per month rent which also eroded the depositors’ assets.
Albray Butterfield Jr. is also connected to the PNP, having been the deputy leader. The Butterfield corporation is known as Butterfield Gold. In November-December of 2011, the liquidators moved the dormant bank’s operations to another facility, reportedly paying $5,000 per month. The only operations involved in the bank’s liquidation were collecting loans and collateral for loans in default of repayment.
While the liquidators have encouraged loan holders to pay off their balances by obtaining new loans elsewhere, borrowers report that they are not being pressured, which appears to be extending the liquation period. It is not known how much the liquidators are charging.