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IN THE UNITED STAT£S COURT OF FEDERAL CLAIMS
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Civil Action No: 93-531 Chief Judgo: Loren A. Smi t.h
1 INDEX 2 3 EXAMINATION BY 4
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Ms. Tornatare
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CORI?ORATION AND CARTERET BANCOR?,
INC. ,
Plaintiffs,
FEDERAL DEPOSIT INSURANCE CORPORATION,
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Plaintif£ 12
Intervenor,
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UNITED STATES OF AMERICA, Defendants _
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West Palm Bea,ch, Florida
November 23, 1999 9:15 o'clock A.M.
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DSPOSITION
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JOEL WAYNE MOOR
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6 7 Mr. Hume 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
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EXHIBITS
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APPEARANCES:
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U.S. DEPARTIvlENT OF roSTICE, crvo:. DMSION COOPER., CARvm & ROSEtm-IAL
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Attorneys for Plaintiffs 1500 K Street, N.W. - Suite 200 Washington D.C. 20005 BY: HAJvUSH P.M. HUME. ESQ.
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Attorneys for Defendant 1100 L. Street Washington, D.C. 20530 BY: TONIA 1. TORNATORE, ESQ
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Q. That
was not any expert testimony, to your
I come back to you over a course of a few hours after our
2 discussion. So to the extent that you rec.ll something
3 after you've given a response, please just let me know that
4 you've recalled something and we can go ahead .nd add th.t
5 to the record to make sure everything is complete there.
6 Do you have any questions before I begin?
7 A. No.
8 Q. What did you do to prepare for today?
9 A. Really nothing. Hamish spent a few minutes with
10 me yesterday to give me a brief outline to let me know what
II this was. I spoke to you briefly on the phone. I h.ve
12 spoken with no one at AmBase. I don't have a lot of time.
l3 so nothing.
14 Q. You anticipated my next question. I was going to
15 ask if you had spoken with any of your former employers at
16 AmBase?
17 A. No, I bave not.
18 Q. Did you review any documents to prepare?
19 A, No, and I have none. 20 Q. If you can please state your full name for the
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recollection? A. No.
Q. You mentioned something about giving a statement 5 to the RTC, the Resolution Trust Corporation? 6 A. Seemed like they had an attorney that I spoke to, 7 and I believe it was in New York. It was doing work for the 8 RTC. as I recall. 9 Q. Do you recall the time frame of that statement?
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A. I would say about four years ago, maybe five. II Q. Do you recall giving that statement under oath? 12 A. Not specifically. I'm sure it was, but I don't l3 recall specifically. I remember flying to New York and I 14 remember spending some time with an attorney in a setting 15 like this. I think there was probably a reporter there, but 16 a specific recollection - 17 Q. Did you have counsel present with you at that 18 statement? 19 A. No. 20 Q. Do you recall having an opportunity to have an 21 attorney represent you in that? 22 A. I'm sure. I always have the opportunity. I don't 23 remember ever thinking I needed one. 24 Q. Let me just explain the procedure that we're going 25 to use in this deposition. I know you have been through
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A. Full name is Joel Wayne Moor. Q. And where do you live? A. TIle exact address?
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Q. Yes, sir.
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Page 10 1 I this a number of times, but I just want to lay down some 2 2 basics for us today. 3 3 1'm going to be asking you a series of questions 4 4 to which you are under oath to answer truthfully and 5 5 completely. If you don't understand any of my questions, I 6 6 please just stop me and let me know I need to rephrase 7 7 something or clarify something. When you do respond to a 8 8 question, I will assume that you've understood my question. 9 9 As you can see, the court reporter is making a 10 10 transcript of all that we say. It's important that we try II II not to speak over one another. And I would .lso ask that 12 12 you provide an audible response instead of a gesture. l3 13 A. I understand. 14 14 MS. TORNATORE, Will Mr. Moor read and sign the 15 15 deposition? 16 16 MR. HUME, Yes. 17 17 Q. Mr. Moor, your attorney has indicated that you 18 J8 will be signing the deposition tr.nscript that's made 19 today. To the extent that you may make substantive changes, 19 20 20 I'll have an opportunity to comment on those. 21 21 First, let me just make very clear, any time you 22 22 need a break, please let me know. I would ask that we 23 23 answer any pending questions before we do take that break. 24 24 Second, I understand that many of the questions 25 and responses that we go through here today, something may 25
Page 12 A. I live .t 113 Cypress Point, Palm Beach Gardens, and I believe the zip code is 33418. Q. What do you do for a living? A. I'm a chief financial officer for us Diagnostic, Inc., a public company at West Palm Beach Florida. Q. What does us Diagnostic, Inc. do?
A. We own imaging centers, primarily MRI imaging
centers in about 18, 19 states.
Q. Do you operate those as, I suppose, your
operations or how - A. We own the centers. We contract the radiologists to do reads and provide services to patients that need to be scanned. Q. How long have you been working at US Diagnostic? A. Approximately three years. Q. Where were you employed prior to that time? A. Well, officially, the last time I was officially employed was at Carteret. Between Carteret and here I did consulting work and got into the boat rehab business; purchased vessels and rehabed them, and dido't make any money. Then I got b.ck into the accounting business primarily as a consultant for this company, and they hired me as CPO. Q. So you were self-employed in between the time you worked at Carteret and us Diagnostic?
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1 responsible for the commercial loan portfolio?
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Q. You mentioned Carteret. When did you start
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A. It's a fairly complicated story. It's not that
Q. Yes, please.
working at Carteret? A. It was the summer of 1991. Q. Do you recall the month in 1991? A. It was right around July 4th. J don't know if it
3 easy to explain, but if you want me to, I will.
A. And, once again, this is even further back.
AmeriflfSt, I believe it was called American Capital, was in
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was immediately before July 4th or immediately after, but sometime in the rtrst of July, end of June. 1 don't remember the exact date. Q. And when you first started at Carteret, what was your position? A. I believe my title was executive vice-president. Q. And what were your duties as an executive vice-president? A. I was in charge of understanding the problems in the commercial real estate portfolio, and dealing with them. Q. What were your responsibilities as to any of the retail or residential type of loan programs at Carteret? A. None. Q. Who was in charge of those? A. I believe the fellow's name was McCabe, Leo McCabe. Understand, it's been eight and a half years so I'm not crystal clear on everything, but I think McCabe was in charge of that. I believe that was his name. Q. While you were at Carteret -- how long were you at Page 14
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the process of at1empting to buy Ameriflrst. I think
American Capital owned a tbrift in Ohio. As I recall,
American Capital -- and they had offices in Miami as well - bad doubts about the information they were getting about the
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commercial real estate portfolio and/or the captive development subsidiary at AmerifIrst. They wanted to do the deal, but they weren't sure of the real estate. Somehow someone at American Capital before they bought the thrift. forced the bank to hire me to be the chief fInancial officer for the development company. And, lilerally, the day I started all management was fired or forced. out. I was in isolation for a brief period. There was a coup at the board. Another CEO was brought in. He interviewed management and realized who I was and he put me in charge of conunercial real estate to figure out what the problem was. I already knew sort of what the problem was, because 1bad access to the Peat Marwick papers that was prepared in conjunction with the proposed acquisition. So I knew there were real problems. And essentially r had the same job at
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I Carteret? A. I was at the thrift from the summer of '91 until
2 3 it was taken over in 1 believe it was December of '92. 1
4 stayed on for at least a year and a half after intervention.
5 Q. SO probably through '93, maybe into tbe summer of
6 '94?
7 A. I was there into the summer of '94, I believe.
8 Q. That's when you returned to Florida?
A. Yes.
9 10 Q. For self employment?
11 A. Right.
12 Q. While you were at Carteret, did your duties change
13 over time?
14 A. No.
IS Q. You were always responsible for the commercial
16 loan asseta?
17 A. Yes.
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Q. Prior to your employment at Carteret, where were 19 you employed? 20 A. I had the same position at AmerifIrst Savings Bank 2 J in Miami, Florida. 22 Q. When did you start there? 23 A. I started very early 1989. Either January or 24 February. It was right after the new year. 25 Q. And who at Amerifirst asked you to come in and be
Page 16 1 Amerifrrst that I did at Carteret; how big was the hole, 2 calculate the problem and deal with it. I was at Ameriftrst 3 from early '89 until it was taken over in March of 1991. 4 Q. Do you recall who that new CEO at Amerifirst was? 5 A. It was a guy named Al Tatie (phonetic). Q. Do you recall a gentleman by the name of Ron 6 7 Burns? A. Oh, very well, yes. 8 Q. How do you recall Mr. Bums? 9 lOA. Let's back up a while. Tatie was hired as the J 1 CEO. 1think while they were looking for a CEO. Burns was 12 the temporary CEO. He was on the board of Amerifrrst. 1 13 don't think he was CEO very long. His job was primarily to 14 fInd another one. IS Q. He was an interim type of CEO? 16 A. Oh, yes. It was obvious. Burns was a director at J 7 Amerifrrst and Carteret. 18 Q. Is that how you came to be employed at Carteret, 19 that Mr. Burns knew your work? 20 A. Yes, he was aware of what we had done at 21 Amerifrrst. And by we, there's a whole group of people that 22 was brought in. And he was instrumental in getting me to go 23 to Carteret, along with all my people. 24 Q. You mentioned something about American Capital 25 having an indication that the real estate problems at
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1 Q. Do you recall as part of your compensatiou at
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1 I left there in 1981 to go into the development 2 business with a client who built condominiums in North Miami
3 Beach. We purchased and operated a hotel in Key Biscayne 4 outside of Miami, Florida aud borrowed very heavily from a 5 money center bank to do that. The bank failed. The bank
2 Carteret that you would receive stock iu AmBase Corporation 3 or stock options in AmBase?
6 was taken over by the FDIC. r essentially did my own 7 workout for the buildings and rebuilt with the FDIC. S I left there after five years after working out 9 our problems and went to work for the remnants of a
10 collapsed &EIT known as Senior Corp. Senior Corp was
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11 previously as eMI, second largest real estate investment 12 trust in the country. It was a problem of there was booming 13 bust cycles in real estate. It was a victim of a previous 14 bust. It had been a RElT that 130 banks had an interest 15 in. I was hired by the company that recently purchased the 16 remnants of the REIT in an LBO. Worked there a little over 17 a year while we packaged and resold all the assets and paid 18 the LBO debt. 19 Q. Do you recall the name of the company that 20 purchased the remnants?
21 A. It was an individual that was the fonner head of
22 lending at Continental TIlinois, and the largest home 23 builder in California, a guy by the name of Bill Lyon that 24 bought Senior Corp. And I believe it was 140 million dollar 25 LBO. Itls bard to remember the exact numbers. He had Page properties coast to coast from Hawaii to Puerto Rico and all points in between. It was sold off in short order. And as assets started to dwindle down, I took the job as CFO with Wolper, Ross, because it was obvious there wasn't anything to do quickly. What had happened, the real estate market had turned and it was easy for them to sell property. And
A. My agreement was only with the thrift. I had no 5 agreement with AmBase, as I recall. No arrangements, 6 nothing. Because had I had one, I think the RTC would ha"e 7 escorted me out the door on takeover. I think that's proof 8 enough. 9 Q. That was because AmBase was still - lOA. It was the parent of the thrift, and had I had any II strings with AmBase, they would not have kept me, I think, 12 after takeover, because there was .- there would be a
13 conflict because they took the child from the parent, so no.
14 Q. Do you currently own any shares in AmBase stock?
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A. I have never owned a share of stock in my life. Q. Mutual fuud shares? A. Never owned a share of stock in my life.
18 Q. Have you worked for any subsidiaries or affiliates 19 of AmBase? 20 A. No, I have not. 21 Q. The company for which you are currently employed. 22 do you do any business with AmBase? 23 A. No. 24 Q. To your knowledge, do you have any financial 25 interest iu the outcome of this case?
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Q. When you first considered taking a role in the
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3 management of Carteret, what was your knowledge of the 4 conunercialloan portfolio at Carteret? 5 MR. HUME: Prior to his coming to Carteret?
6 MS. TORNATORE: Yes.
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7 it was getting ready to turn again. 8 My experience in real estate has been over a 9 twenty-five-year period. I've seen a lot of ups and downs, 10 and usually in the down periods I've found employment as CPO 11 of non-real estate companies so I could feed my family, 12 which is what I'm doing now. Hopefully that answers all the I3 hackground questions.
14 Q. I think we got tluough the work history there.
15 Let me just clarify a point. Do you have any graduate 16 degrees? 17 A. I'm a CPA., B.S. in accounting.
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Q. Is your CPA license current? 19 A. Yes, unfortunately. I hate accounting.
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Q. Through your work at Carteret, did you ever hold a 21 title at AmBase Corporation? 22 A. Not that I recall. I worked only for the tlnift. 23 Q. Do you recall any other titles or positions you 24 held at Carteret? 25 A. I really don't.
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Q. When you were considering the decision. A. I can only tell you what Ron BW1ls told me. And
9 it's really anecdotal. He indicated that there was a thrift 10 in New Jersey iu which he was involved with as a board II member that had very good franchise, that had problems in 12 the conunercial real estate area that needed attention, but 13 in the long run it could probably be saved. And it would be 14 a nice place to go after going through the failure and 15 demise of Amerifrrst, which was a very painful experience. 16 And it seemed like after talking to Ron and Dick Bianco, it 17 really seemed like there was hope, because Bianco and those 18 people were very savvy Wall Street types, and there was a 19 hope to recapitalize. The game then was to recapitalize the 20 thrifts and get them back to health and sell them down the 21 road, and it appeared as though that could happen. There 22 were problems in the conunercial real estate. I didn't know 23 how big, I hadn't looked at any of the loans. 24 Q. Do you remember that Mr. BW1ls and Mr. Bianco had 25 a realistic sense of the problems in the commercial loan
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Page 25 portfolio? I MR. HUME, Objection. It calls for the witness 2 to testify as to Ihe understandings of other people and 3 4 calls for speculation. 5 A. They said they don't know, that we want to hire you, so you tell us. It was very clear they didn't know.
6 They said we think there are problems, but we need somebody
7 8 like you to look at them, so - 9 Q. They needed to bring you in to clarify?
10 A. Yes.
Q. Were there any other sources of infonnation that
JI you used to evaluate before coming into Carteret?
12 A. No, took it on a flyer.
13 14 Q. It was just your discussions with Bianco and Mr.
15 Burns?
A. Right. I liked Burns a lot, and after meeting
16 17 Dick Bianco, I liked him too. We hit it off.
MS. TORNATORE, If we could mark this as
18 19 Deposition Exhibit 1.
20 MR. HUME' Do you want to give the witness the
21 marked version?
22 (Whereupon, the document referred to was marked
23 for identification as Deposition Exhibit Number 1.)
24 Q. Mr. Moor, I'm going to show you what has been
marked as Deposition Exhibit I. There is an ADDIIS number
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Q. Did Mr. Burns or Mr. Bianco ever make any commmts
to you about KPMG efforts? MR. HUME, Objection. Asked and answered. A. Not that I recall. Q. Were there any other members of the management al Carteret who commented to you on KPMG's - MR. HUME, Objection. Asked and answered several
times now.
Q. -- review?
A. We got rid of everybody. I didn't talk
to
anyone. I just flred them all. Q. KPMG was removed as the auditors at Carteret? A. I think before I got there. Q. Do you recall having an opportunity to review KPMG work papers for the year end financial statements, 1990? A. Never saw them. Never asked for them. Q. Were you involved in responding to the management letter with respect to the 1990 financial statements? A. No. MS. TORNATORE' If we could mark this as Deposition Exhibit 2. (Whereupon, the document referred to was marked for identiflcation as Deposition Exhibit Number 2.) Q. I'm going to show you what we marked as Deposition
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Page 26 on the document, PAM005 0035. If you want to take a moment just to look over that document.
A. I have.
Q. Do you recognize that document?
A. No, but I know what it is.
Q. Can you just describe what it is for us then?
A. I think it's a report that Peat Marwick did on the
lending function before I got there. Never read it, never
thought five minutes about it.
Q. Why was that? A. I thought Peat Marwick was lost. I wouldn't care what they said. Bunch of idiots. Q. What do you mean by lost? A. Well, after I got there and realized there were problems, and they just audited the company, I didn't care what they thought. A bunch of kids wrote a report. I just wouldn't have read it. Q. In your opinion they were unaware of the problems
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20 A. I don't know what they did. I have no idea. I've 21 never spoken to any of them. 22 Q. To your recollection, did the management at 23 Carteret discuss the report, Exhibit I? 24 A. I don't know, it was done before I got there. And 25 I knew there was a report. I never read it, I can assure
Page 28 I Exhibit 2. The ADDtIS number on that document is FAM002 2 2361. If you want to take a moment just to look at that. 3 A. I understand what it is. 4 Q. Do you recognize Exhibit 2? A. I've never seen it before. 5 Q. Do you recall in discussions with either the board 6 7 or senior management at Carteret responding - 8 MR. HUME, Objection. I think you asked him 9 already. 10 A. I don't recall anything about the letter. 11 MR. HUME, He said he didn't take part in this. 12 Q. Were you involved in the discussions of KPMG's 13 perfonnance? 14 MR. HUME, Same objection. 15 A. No. 16 Q. You were not then included in the decision to 17 remove KPMG? A. No. 18 Q. Who were the new auditors that were brought in? 19 A. Price Waterhouse. 20 Q. Whom do you recall at Price Waterhouse? 21 A. I don't remember the names. The partner was a 22 23 very nice fellow, but I don't remember the names. I guess 24 I'm getting senile. Q. Does the name Bob Flaum sound familiar? 25
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A. Yes. Nice guy.
1 got up there and fired everybody and hired a lot of the
2 people that I had at Amerifirst. The appraisals came in
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Q. Any other individuals at Price Waterhouse?
A. No, I don't remember the senior or the manager. I
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really don't. Every year you have auditors. I don't remember the ones we had last year where I'm at now. They come and go. They're like dentists.
Q. When you first started working at Carteret, what
was Price Waterhouse's involvement?
A. They were the outside auditors. I don't think
they were actively doing anything, it was in the middle of the year. Q. Were they specially engaged to do any type of review at Carteret? A. I remember their presence when we first looked at the portfolio. They went around with me and looked at the properties. Q. Do you recall who had requested that they perform that? A. I really don't. They were there. They did their own work. We discussed the loans in great length, both Price Waterhouse and examiners in the early days. Q. Was their review of the commercial loan portfolio, was that independent of your own? A. Yes. They were allowed to reach their own conclusions. We visited the property. They had their own Page 30
4 hundred appraisals, it doesn't happen in one day. First you
5 got to find the people to do the work. I had to hire my own
6 internal guy to review appraisals. He would contract with
7 the people to do them. To get appraisals on everything we
8 needed might have taken a year. As I recall, we did the
9 really big ones and the troublesome ones first. You can't
10 get 100 appraisals in one day. You can't find the people to
11 do them. It's a long involved process.
12 Q. Over a period of time you were requesting that
13 appraisals be done on certain properties?
14 A. Definitely every one that had a problem. 15 Q. Any loan that was classified then? 16 A. Well, I don't get into classification. If it had 17 a problem, not paying, or if we visited it and it had 18 deferred maintenance, we got it appraised. Classifications 19 were done with someone else. I don't really care. 20 Q. What do you mean by problem? Do you mean 21 repayment was in question or there was delinquency on the 22 account? 23 A. If they're not paying, that's a problem. If 24 you're actively involved in foreclosure, that's a problem. 25 If you visited the property and it's totally rundown and
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1 you're still making payments, that's a problem because that
I staff, one running discounted cash flows, whatever. We had
2 to look at them in a rapid manner. Time was of the
3 essence. It wasn't like they were using my work. We'd look 4 at the same property, do the same work. And they'd come up
5 with their estimate and I'd come up with mine. 6
Q. Do you recall them preparing any type of written
2 means sooner or later you're going to stop making payments 3 because you have no tenants. Problems. Cormnon sense 4 problems. Or if there's one under construction and there's 5 no tenants, then that I s a problem. 6 Q. Vacancy rates or something like that?
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A. Well, if you go out and visit a property and it's
7 report? 8 A. I don't know that they did. If they did, I never
8 90 percent done and you ask for the tenant list and there's
9 none, that's a problem. Q. Even if payments are current on the account?
11 A. During construction period usually there were no
12 payments, so you expect them to be current.
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9 saw it. This was preliminary work. As I recall, the 10 mission was more to get a sense as to what the hole was, how
1I big a problem was there. We knew that we didn't have the
12 time to do detailed work for each and every property, but we 13 had to make some guess as to how much of a deficiency there 14 would be, because you have to book something if there's a 15 problem. You have to refine your estimate as time goes on.
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as you're doing that. And that's what we did, and they did that. They came up with a number and I came up with a number. Q. As part of the review that Price Waterhouse or perhaps yourself were doing over the commercial loan portfolio, do you recall when or if appraisals were ordered on properties? A. Well, I didn't have a staff of any size until I
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MS. TORNATORE, If we could mark this as
Deposition Exhibit 3.
(Whereupon, the document referred to was marked
for identification as Deposition Exhibit Number 3.)
Q. Mr. Moor, I'm going to show you what we've marked
as Exhihit 3. The ADDIIS number on that document is WOQ672
1032. Do you recognize Exhibit 3?
A. No.
Q. Do you want to take a minute just to review it?
A. I see what it is.
Q. Can you identify Exhibit 3?
A. Looks like a Iist of properties that appraisals
had been ordered on it.
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Q. Do you recall who Mr. Haines was?
A. All of the loans were reviewed the same way. How
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A. I fIred him. Braun I think I fired, too. I don't
3 remember him. Who was he? Can I ask you that? I forget
4 who hewas.
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Q. I'm afraid you're here to ansWer the questions.
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A. I probably fIred Braun as well.
Q. What were their positions at Carteret?
8 A. Haines was in the connnerciallending. He was a 9 lender that was kind of working in the commercial real 10 estate area. I'm not exactly sure what he was doing. 11 Q. And Mr. Braun, what do you recall that Mr. Braun 12 was doing? 13 A. That name just totally escapes me. I'm sure I 14 fIred him. I must have fIred him the first day. I think I 15 kept Haines a minute or two. I don't remember Braun. 16 Q. Would Exhibit 3 just be a typical list of
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17 appraisal requests that were made? 18 A. It may be. I don't know how they did business 19 before I got there. 20 Q. Do you see that you're cc'd on the bottom? 21 A. Yeah. July 11, 1991. I had probably been there 22 maybe a week, I guess. 23 Q. Do you recall making any requests of the existing 24 personnel in the commercial loan area of what appraisals had 25 been requested? Page 34
I A. No.
2 big was the hole, what was the problem.
3 Q. Was there any information that you had to convey
4 to the regulators with respect to the loans to one borrower?
5 A. No.
6 Q. Would you have had to made them aware of loans to
7 one borrower which exceeded the regulatory requirements?
8 A. Never thought two seconds about it. The money was
9 already out. I was just there to try to fIgure out how much
10 we were going to get back. These deals were done before I II had got there. 12 Q. With respect to your work, your review of the 13 commercial loan portfolio, I was interested in if you could 14 describe structurally what you did when you came into 15 Carteret? 16 MR.IIDME: What do you mean by structurally? 17 Q. Were there changes to the organization of the 18 commercial loan area that you made? 19 A. I fired most of the people there. I interrogated 20 them to see if they were willing to -- a lot of them made 21 the loans. That's usually a problem. People who make the 22 loans are very hesitant to admit they made a mistake. 23 Anyone that didn't look right, I just got rid of, and 24 proceeded to look at the loans and visited the property. A 25 lot of these guys never seen tbe property. Page 36
1
Q. They hadn't made any type of site visits?
·
2 Q. On the second page of Exhibit 3, there's a list A. A lot of them weren't familiar with their own 2 3 there. I was wondering if you can tell me what that list 3 portfolio. If they couldn't answer questions, I fIred them 4 on the spot. I think I got rid of about 50 people. 4 is? 5 Q. You mentioned bringing some of the personnel at 5 A. Looks like a list of loans to one borrower for 6 ArnerifIrst you had worked with? 6 three borrowers. 7 A. Yes. Q. Do you recall issues concerning Carteret's loans 7 8 Q. Do you recall how many you brought? 8 to one borrower? 9 A. Not exactly. Maybe 20. It's hard to remember. 9 MR. IIDME: What do you mean by issues? Do you 10 Q. Were many of them brought up to New Jersey or did 10 mean regulatory requirements? 11 some of them remain in Florida? 11 A. We had a lot of these. The portfolio was full of 12 A. Carteret had a significant portfolio in Florida. 12 them. 13 And we were able to keep the biggest chunk of people in 13 Q. How many, to your recollection? 14 Florida at a location in Delray. The legal guy, I guess you 14 A. I don't remember. It was a lot. 15 would call him general counsel for the real estate group, 15 Q. Do you recall a number of these borrower 16 relationships exceeded the regulatory requirement? 16 went to Jersey with me. The guy that did the reconciliation 17 of our work to the TFR, Thrift Financial Reporting, a guy 17 A. I don't recall that at all. The money was out. I 18 mean, none of that would have mattered to me. The question 18 named Bruce Campbell, went to New Jersey with us. The rest 19 traveled back and forth. The properties were all over the 19 is how big is the hole. The money is gone, can't get it 20 country, it didn't matter where we were. I was able to use 20 back. I remember Profeta was a crook. He belongs in jail. 21 the people at Arnerifirst who knew the rules for evaluating 21 Weingarten was a nice man. The Forstmann Little 22 troubled assets. The OTS looked at loaning, and had an 22 relationship, I don't remember much about that. I think we 23 accountant. We did this before on a large scale so it was 23 did a criminal referral on Profeta. 24 easy to fIre it up again. 24 Q. Do you recall what type of perhaps special review 25 Q. Who was in charge of the REO properties? 25 the loans to one borrower relationships received?
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Page 37 A. Sales was handled by a guy named Stanley Mohr. I tried to get the fellow who worked with me at Amerifrrst to move up to Jersey and he refused. He's a good friend of mine and he said I'm not going to do it again. I met him at Senior Corp and took him to Amerifrrst with me. He said no, I'm not going to work for any more thrifts. Stanley Moore did the sales, but the REO was handled by a number of different people. Groups of properties would be handled by a manager, and he might be responsible for 10 REO properties; management, the upkeep. But just to explain it, the way we were organized, I had people in appraisals, I had a legal department, I had an accounting department, loan servicing department. So we had a discipline so there was somebody -- there was a lot of overlap in terms of responsibility. Somebody might be evaluating it from an accounting point of view, somebody might be looking at it from a managing point of view, somebody might be worrying about it from an appraisal point of view, somebody might be worrying about it from a foreclosure point of view. And oh, by the way, when we get title, Stanley will sell it. So that's how it worked. It was organized like a real estate company. Q. Who was in charge of the accounting in the commercial loan area? A. Jose Garcia. Page 38
A. Yes.
Q. Approximately how many people were in the
2
3 commercial loan group?
4
A. At Amerifirst I know it was about 50. 1 have a
5 feeling in total it was probably about the same in Carteret 6 when you added everybody up, the servi=s, the appraisers,
7 in Jersey, Florida, legal, it was probably around SO, 55 8 people. 9 Q. Now, following your review of the commercial loan 10 portfolio, what type of action did Carteret's management 11 take? 12 MR. HUME, Could you clarify the time frame? 13 Q. Just after you were done with your review, you 14 were reporting things - 15 MR. HUME: Object in the sense there was action 16 taken before their review was 100 percent complete. 17 A. I want to make that clear. The review continued 18 to the day we were taken over. We never stopped. We were 19 continually having to reevaluate the estimates, lease up 20 properties. It never ended. The process was just refined 21 as time went on. There was an initial pass at a guess as to 22 how big the hole would be, and that was continually refined 23 with each passing day. It never ended. 24 Q. What was your estimate of the deficit? 25 A. As I recall, it was 150 million dollars from the Page 40 1 get-go. That number proved to be fairly accurate. It went 2 up and down. I don't remember there were any material 3 changes to it as long as I was there. 4 Q. Do you recall the time frame when Carteret 5 recognized that 150 million dollar deficit in the commercial 6 loan portfolio? 7 A. Not precisely. It was rather quick because I 8 don't think they wanted to put out a 10 Q without 9 recognizing the problem they felt intuitively we all knew 10 was there. We dido't want to take ownership of a big II problem. It was quick. I think a month maybe. Maybe a 12 little longer. I know I was on a plane nearly every day. 13 Q. Would it have been a June '91, 10 Q? 14 A. Yes, June 30. So that would have been 45 days. 15 I'm not sure if we got it done by August 15 or not. It 16 might have been the third Q, because I didn't start until 17 18 19 20 21 22 23 24 25 the second quarter was over. The time, I'm unclear. I just know it was important to get it done quickly. We didn't want to get ownership on this. It was a problem that had to be recognized, and we were going to attempt to do it, with the caveat it had to be refined and refined and refined. Q. Constant review? A. Constant. Never ending. Q. In the course of your review, did you have an opportunity to evaluate whether this deficit or parts of
1 Q. Do you recall the gentleman's name I think you 2 mentioned was the general counsel?
3
4
A. John Mudd. Q. How about the loan servicing group? A. I don't remember, because keep in mind that a lot
5
6 of times I get the Amerifirst and Carteret experiences and
7 loans confused. Because we had loans in the same area, I
8 had a lot of the same people. Sometimes I think it was an
9 Amerifrrst loan, and actually it was Carteret. To the
10 extent I make mistakes, you have to forgive me. It's been
11 10 years.
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12 13 14 15 16 17 18 19 20 21 22 23 24 25
As I said, the faces were the same. The loan servicing at Carteret, I don't remember specifically who handled it. That was done in Jersey on the same floor as me, but who was the person in charge of the actual loan servicing, I'm not sure. Bruce Campbell could answer that question because he's the person who talked to the loan servicing people to get the reports to do the TFR. It Ylould have been one notch down. Q. Who was Peter Mitchko? A. He was kind of my right-hand man for active loans. He didn't do REO. He did the loan administration work. He would have assigned the individuals to loans. Q. And under each of these, I suppose, group heads, you had individuals doing their work?
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I this deficit would have been recognized in prior quarters or
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1 is significant to nearly anybody, at least to me.
2
2 in prior periods of time? A. It wasn't recognized at all or it wouldn't have 3 4 had to take the 150 million dollar hit. It wasn't there. 5 Q. Was it apparent if anyone had done the review 6 previously, that they would have seen this deficit? 7 MR. HUME' It calls for speculation as to prior 8 management's review. 9 A. I don't know what they did. I did what I had to 10 do. I don't know what the others did. I wouldn't have done II it the same way, but -12 Q. Do you recall what impact this 150 million dollar 13 deficit had on Carteret's capital position? 14 A. It was a significant number. And it was an 15 important decision. I think Price Waterhouse agreed that 16 the number was somewhere in the ball park. I think the OTS 17 did as well. It was a tough decision to make. I took the 18 job with the understanding that if it was a problem we were 19 going to recognize it the way it had to be recognized. I 20 wasn't going to do it half way. They knew that going in. 21 It was also very clear to me Bianco wanted to know what the 22 problem was. He didn't want to pussy foot around it. You 23 tell me what it is and we're going to deal with it, don't 24 lie to me. It was a tough decision and one we knew was 25 coming. It had a significant impact. 150 million dollars
2 Q. With respect to Price Waterhouse, did they concur 3 in your assessment of 150 million dollar deficit in the 4 commercial loan portfolio? 5 A. Yes. You know, it's a subjective exercise. I 6 think we were not materially different. I think we were in 7 the sarne ball park. And ors .. I don't think they ever 8 wrote anything down, but, believe me, I talked to O'Rourke 9 nearly every day. We all knew what was going on. 1 have 10 discussed the loans at great length with Price Waterhouse j J and the OTS. If you tum the lights on, tbere's not a lot 112 of mystery. If there's a problem, it's not that difficult 13 to get your hands around what you think it's going to be. 14 It takes a while to get the absolute proof, but most of it 15 is common sense. 16 Q. Was that Tom O'Rourke at OTS? 17 A. Yes. 18 Q. Do you recall anyone else performing a review of 19 Carteret's commercial loan portfolio at this time? 20 A. It's difficult to remember who all the players 21 were. Keep in mind that Bianco and Kramer were actively 22 trying to recapitalize the thrift, so they were constantly 23 exposing the thrift to outsiders to see if they can interest 24 them in making an investment. There were other people who 25 looked at the loans other than OTS, Price Waterhouse and Page 44 1 me. I don't remember what flnns were used, there were a Lot
2 -- it's difficult. But other people did look at them.
Q. Do you recall if that increase in the loan loss
3 reserves, did that place Carteret out of regulatory capital
4 compliance?
3 Were official studies ever done? I never saw any, but that 4 didn't mean there weren't. Certainly I made a lot of
5 presentations to people they were trying to interest in 6 investing. 7 MS. TORNATORE; Let me see if we can mark Exhibit
5
A. See, now we Ire getting into an area, was the
6 goodwill in and out. I don't remember. I think the 7 assumption was we had goodwill. There was no -- I didn't
8 care what the capital was. I wanted to find out what the 9 hole was. My estimate on the hole was 150 million dollars. 10 They had to deal with whatever that was. If there was a 11 problem, they'd deal with it. I was never put into a 12 position, if you do that -- nohody ever said a word to me. 13 They said go out and kick the tires and tell me what this 14 mess is worth. To the extent there were regulatory issues 15 or problems, I didn't deal with it because I didn't want to 16 hear about it. I wasn't going to let anything about the 17 regulatory environment color the truth. And they never put
18 that pressure on me. Never even said a word.
8
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13 14 15 16
4 I think we're up to now. (Whereupon, the document referred to was marked for identification as Deposition Exhibit Number 4.)
TIlE WITNESS; Can I ask something? Are you guys
cold? I'm freezing.
MS. TORNATORE; Let's take a break.
(SHORT RECESS TAKEN.)
MS. TORNATORE; We're back on the record.
Q. I'm going to show you a document we've marked as
17 Exhibit 4. There is an ADDJIS number on the bottom there,
18 FAM0022407. If you want to take a few minutes and just
19
Q. No one ever asked you to revise your 150 million
20 dollar figure?
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21 A. Never. I can tell you everyone was shocked and 22 upset, but there was never any pressure, well, if you make 23 it this -- nothing. This is what you say it is, we're going 24 to deal with it, which is why I took the job. And why I 25 still think for a lot of these guys it was a difficult
19 familiarize yourself with Exhibit 4?
A Okay.
21 Q. Do you recognize Exhibit 4?
22 A. I don't remember it specifically. I know what it
23 is. It's a management letter.
24 Q. And who is the letter from?
25 A. Price Waterhouse.
20
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I the connnercial asset management division?
2 A. No. They did an audit of the bank these are 3 management letters they generated as a result of their audit 4 work. 5 6 Q. Do you recall being asked questions about the commercial asset management division? 7 A. Not specifically, no. 8 Q. If you could turn the page where there's an ADDtlS
9 number on the bottom 2411.
10 A. Yes.
11 Q. And if you would just read the two pages there
12 addressing the commercial asset management division, to
13 yourself.
14 15 A. Okay.
16 Q. Have you had an opportunity to read those two
pages there?
17 18 A. Yes.
Q. Do you recall Price Waterhouse making a comment as
19 20 to the management that the bank was doing of real estate
properties and those properties that were managed by others?
21 A. I really don't.
22 Q. Do you recall that they expressed concern about
23 24 the efforts that other, I suppose, contractors or outside
consultants were retained to manage the properties?
25 Page
Q. Do you recall Price Waterhouse doing a review of
Page 47 Ferreira, Craig Rosen, Andy Bowes, Marsha Morgan. There were a whole host of them.
Q. And the individual loan officer or asset manager
would be responsible for supervising outside property
management?
A. Yes.
Q. Do you recall Kenneth Leventhal performing a
review of Carteret's commercial loan area?
A. I remember them specifically looking at the
Amerifirst portfolio in great detail. I didn't remember them at Carteret. Mayhe they did there as well. I know Kenneth Leventhal very well. I've had a lot of work with him over the years. I don't remember them in Carteret, but I guess they probably were there. Q. You recall them because they kind of specialize in real estate? A. Oh, yeah. They were our auditors at Senior Corp. I don't recall if they were there for a potential investor. If they were there, I don't rememher why. Q. You don't recall if Carteret had retained them? A. I remember them specifically at Amerifrrst because my friend was the partner in the engagement. I don't remember them at Carteret. That doesn't mean I'm not senile. Q. We might get to a document later on. Page 48
A. That's fine. I get the two confused readily.
Q. We'll hopefully clarify that with a few of the docwnents. A. Okay. Q. Do you recall in 1991 having an opportunity to review any of the reports of examination by either OTS or the FDIC? A. I don't specifically remember being provided any such documents. I had a lot of conversations with Tom O'Rourke. He may have shown me a specific write-up on a specific loan. Q. Do you recall any of the examinations staff at the
46
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I A. Not n:ally. I'd like to make it clear that I 2 probably received one of these every year in my professional 3 existence. I generally ignore them. They're required to do 4 this. You have to come up with points to suggest 5 improvement to management. And I'll be perIectly candid, I 6 never really look at them and I don't care what they say_ 7 Q. Was Carteret, I suppose, out-sourcing a lot of the 8 management of properties? 9 A. They bad to. A lot of tbese properties were 10 thousands of miles away so there bad to be somebody on site
11 collecting rents, dealing with the maintenance problems. 12 You always have to have a management company. 13 Q. Who in your com.mercialloan group was responsible 14 for administering or reviewing the work by outside property
15 managers? 16 A. It would have been the aSSet manager. Asset 17 manager may have five or six properties where there was a
13 FDIC?
18 management company involved. That asset manager would have 19 to deal with whatever management company was there doing the
20 work for his property.
21
Q. Was this someone in Mr. Mitcbko's group?
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22 A. No, this would be REO, because yon wouldn't be 23 tmnaging property unless you owned it. II would be
24 somebody, not necessarily understanding more, but most of 25 the asset managers that did REO were in Florida. Steve
A. At the FDIC? I do at Amerifirst, but not at Carteret. Q. Okay? A. Were they there? I don't remember. I do specifically recall meeting with them at great length at Amerifrrst, but I don't remember at Carteret. Q. We'll, get to some documents later on that might refresh your memory on FDIC. I want to go back to the initial review that you performed over the commercial loan portfolio when you first started at Carteret. Who asked you to perform this review" A. I'm not sure I was asked to perform a review. I Page 45 - Page
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1 just about all the borrowers. I can't say that any of the 2 meetings were pleasant. That was part of the refining 3 process; you meet with the borrower and see what they're
4 going to do, surrender or fight. But for the first pass,
5 no. Very few. 6 Q. Typically just the loan officers? 7 A. Even those, mostly it was just to meet them and 8 fire them. 9 Q. Do you recall in terms of percentage how many of 10 the loan officers you let go? 11 A. No. I just remember after it was over the floor 12 was empty. Just a few of us on the floor. 13 Q. Do you recall any of the loan officers or a member 14 of prior management making these site visits or site 15 inspection on the properties? 16 A. I don't recall that. I didn't go with any of 17 them. 18 Q. Do you recall taking any of the loan officers with 19 you when you did site inspections? 20 A. I don't think there were hardly any to take. I 21 only kept a few guys. 22 Q. The rest of them weren't there any longer? 23 A. No. 24 Q. Do you recall if at the time that you arrived 25 there was an independent internal loan review area?
I Q. Why didn't you recommend that Carteret start 2 lending in the conunercial loan area? 3 MR. HUME, Objection. Asked and answered. In 4 terros of what his job was when he was hired, it had 5 nothing -6 A. I'd rather die than make a loan. I'm not a 7 lender. I don't like people. I would never give anybody a 8 loan. I wouldn't loan my mother money. I've seen too much. 9 Q. That's some pretty tough standards. 10 A. All borrowers are essentially swine. They needed 1I to be treated as such. I couldn't1end money. I'm 12 psychologically incapable of doing it. 13 Q. You typically come into institutions -14 A. I'm a workout guy. 15 Q. To do workouts? 16 A. Yes. 17 Q. Do you recall the amount of time you would have 18 spent reviewing individual properties? 19 A. Never stopped. Looked at them continuously as 20 long as I was there. Traveled constantly. 21 Q. SO it was a full-time task for you, this review? 22 A. More than full-time. Worked around the clock. 23 That first month I don't think I had a day off. 24 Q. That includes weekends? 25 A. We worked 30, 40 straight days trying to come up
Page 54
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1 with a number. Weekends, nights. Never stopped.
A. If there was, didn't do much. I don't recall it Q. Do you recall if there was a credit review
2.~
2
Q. Do you recall whether or not the corporate lending
3
3 was included in your review? Do you understand what I mean?
4 department that would evaluate the underlying credit before 5 the loan was made? 6 A. I wouldn't know what that is. I don't know. 7 Q. Did you do any reorganization on the credit review 8 side of Carteret's commercial loan area? 9 A. I don't know what that is. I had a real estate 10 company. I carne in and organized the real estate. The 11 loans were made. 12 Q. Typically when you would, I suppose, work in a 13 commercial loan area, would you have a separate department 14 from the loan officer who would actually extend the credit, 15 you would have a separate department? 16 A. We weren't making loans. We were foreclosing 17 loans or hoping desperately to get paid. We didn't make any 18 loans. There was no credit to give, it was over. We wanted 19 the money back. 20 Q. Why wasn't Carteret making loans in terms of the 21 commercial loan area? 22 MR. HUME' Objection. Speculation as to a 23 decision made in 1989. 24 A. They weren't. There was no reason to. My job was 25 to get the money back, as much as possible.
4 A. Yes. There was a small amount of commercial 5 loans. I don't remember the dollar amoWlt, but that fell 6 under my purview. Most of them were kind of real state 7 related. They called them corporate loans, but they were 8 really real estate backed, so same drill. Q. They then were included in your analysis? 9 A. Yes. Ob, one of them is right here. That Was .10 1I I believe that was in the corporate area. Forstmann Little. Q. Forstmann Little credit on Exhibit 3? 12 A. Yes. 1 think that might have heen performing, 13
14 that's why I don't rememher it. 15 16
Q. Perhaps a restructuring situation?
A. The fact 1 don't rememher mnch ahont it tells me
17 it was probahly okay. There weren't a lot of them okay, hnt 18 this must have been, because I don't really have much of a 19 memory about it. Q. Do you recall your findings with regard to 20 21 reserves? MR. HUME: Objection. Asked and answered. 22 A. 150 million dollars. 23 Q. The 150 millioo dollars was the reserve that 24 25 needed to he taken?
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were just not conversant in the assets under their management, what did you mean by not being conversant? MR. HUME, Objection. The document speaks for itself. A. I think it really does. They just couldn't give me the information quickly that I wanted, that I thought they should have had. Q. They didn't have information on the current value of the property? A. Probably hadn't even thought about it. Q. Cash flows on the property? A. Asleep at the wheel. Q. Condition of the property? A. Right. Q. In that paragraph you also indicated there was some filtering of information to the regulators and the former auditors. Do you recall where you got that impression from? A. Not specifically. Q. Generally? A. I spoke to everybody there. Yeah, generally, there had to have been, in my opinion. Q. That was just through conversations that you would have with the regulators or -A. Well, the regulators were, in my opinion, unhappy Page 62
2
3
4
5
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6 7 8 9 A. We followed the rule specifically. Where NRVs 10 were called for, we used NRVS. Where fair values were 11 called for, we used fair values. 12 Q. I think you indicated that there was a certain 13 individual who was responsible for regulatory and accounting 14 compliance? 15 A. Well, you're referring to Bruce Campbell, who 16 would convert our records to the format required for the 17 TFR. There was an entire accounting group who did the fair 18 values and NRVs, accumulated the information to prepare the 19 books. For a lot of the properties, we owned them, we had 20 to do the accounting. And from the accounting it's very 21 easy to do a fair value and NRV, you have access to all the 22 information. We do all that. We had a whole group of 23 people. 24 Q. Mr. Campbell was more responsible for the 25 regulatory'A. He was more responsible for the reconciliation of
Page 63 Q. Hence the fair value analysis would be much smaller? A. Much more punishing. Q. The value would be much smaller than an NRV? A. Yes. Q. Do you recall which method Carteret used when you were in charge of the commercial loan area? MR. HUME, Objection. He just --
Page 64 our real estate world to the TFR. He was the bridge. Q. TFR being the thrift financial report? A. Thrift financial report. Because it's important to understand, we were organized as a real estate company We were pretty blind to the thrift implications, except as it related to we followed the rules for valuing assets. At some point all our information had to be in different format to go into the TFR. Bruce Campbell, former bank examiner, did that work. Q. SO there was a difference between your internal reporting and your regulatory reporting? A. Yes. We were organized as a very simple straight forward real estate company. Q. Let's see if I can find the paragraph. I think it's in that same third paragraph there. You indicate that the loan officers were not sensitive to environmental
1 with the way they had been treated the prior year. I don't
2 3 4 5 6 7 8 9 10
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I know what their own write-ups say, but I now what O'Rourke 2 thought, that he wasn't getting the straight scoop from some 3 4 of these guys. And when I talked to the loan officers, I didn't have a good feeling about any of them. That's why I 5 got rid of them. I didn't like them. 6 7 Q. There's also a statement in that Paragraph 3 there regarding there are a few, if any, net realizable value or 8 fair value analyses on troubled assets. 9 A. I see it, yes. 10 Q. Are those, I guess generally, appraisals of 11 properties? 12 A. No. That's an accounting construct that's J3 required for troubled assets. 14 Q. What or how do you calculate the net realizable 15 value? 16 A. The primary difference between net realizable 17 value and fair value is the discount rate you use in 18 bringing the cash flows back to the present. If it's not 19 too troubled, the rule allows you to use the cost of funds. 20 If it's REO or foreclosed or otherwise severely tainted, you 21 have to use the market risk rate when you discount cash 22 23 flows. That's the distinction. Q. And the market risk rate would be much higher? 24 A. Oh, yeah. Double, maybe even more. 25
issues.
A. I see it, yes. Q. What did you mean by that statement, environmental
issues? MR. HUME' If you recall. A. Well, I do recall. The environmental issues on commercial loans can be a big deal. And generally if there's a problem, one of the things you have to order, in
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Can we take another break? MS. TORNATORE, Yes. Let's go off the record.
I movie backward. It's what do we got here, are we going to
2 get the money back, and, if not, how much are we going to
3 lose.
(DISCUSSION HELD OFF THE RECORD.) MS. TORNATORE,
Back on the record.
5
Q. Mr. Moor, I think we were just getting into the
6 conunercial or the corporate lending aspect of Carteret. Do 7 you recall having reviewed the policies with respect to the 8 corporate lending area? 9 A. No. 10 Q. Do you recall Carteret extending corporate loans II outside of its local market area? 12 A. Well, that was the case generally with both pieces
·
13 of the portfolio. They had loans all over the country. 14 Q. The conunercial real estate side of the portfolio? 15 A. Yes, and corporate. 16 Q. How would Carteret monitor loans that were not in 17 its local markets? 18 A. I'm not sure before I got there what they were 19 doing. I'm really not. 20 Q. In your opinion, were they monitoring the credits 21 that were outside of the local markets adequately? 22 A. Well, let me explain. Generally Carteret would 23 not be the lead on a large corporate deal, they would be a 24 participant. I think they would rely mostly on the shared 25 national credit review more than anything, because they I 2 3 4 5 6 7 8
9
4 Q. Let me step back a minute. I'm going to ask you 5 some more specific questions about particular credits now. 6 Do you recall a loan that was known as the Maitland 7 Properties Investors, Limited loan? 8 A. I don't remember the loan specifically. Maitland 9 is a suburb of Orlando. I'm guessing. It might have an 10 office building. I don't really remember it specifically. 11 I do remember going to Maitland many times because ,12 Amerifrrst had loans there as well. I don't remember 13 anything specific about the loan. 14 MS. TORNATORE, Let's go ahead and mark Exhibit 15 6. 16 (Whereupon, the document referred to was marked 17 for identification as Deposition Exhibit Number 6.) 18 Q. I'm going to show you what we've marked as 19 Deposition Exhibit 6. There is an ADDllS number WOQ654 20 2108. Do you want to take a moment or two and just 21 familiarize yourself with that document. 22 A. Now I see why I don't remember it. 23 Q. Why is that? 24 A. Obviously this loan was compromised early on in 25 the game. And I had other loans at Maitland with
10 11 12 13 14
Page 70 dido 't have the horsepower of these giant credits. Some of deals Mani Hani were involved, Chemical. They weren't the lead. So I don't know how to answer the question. They were like the end, the tail. And they had to be happy with what they got either from the lead bank and/or the shared national credit review, if that answers the question. Q. What evaluation would they make with respect to the shared national credit? A. I don't know. I'm sure they just bought into whatever came out. I dido't really have the right to even disagree. They just put it into a file. Q. All they did was buy the participation? A. Yeah. It my knowledge Carteret was not the lead on any of these. They were generally a small slice of the
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15 huger credit. 16 Q. With respect to conunercial real estate lending 17 outside of its local markets, do you recall how Carteret was 18 able to monitor those partiCUlar loans? 19 MR. HUME: You're asking before his time at the 20 bank, at the thrift? 21 MS. TORNATORE: Based on his review, yes. 22 A. I don't know what they did. And I dido't spend a 23 lot of time reviewing what they did in the past because, 24 once again, my mandate, what was the problem, figure it 25 out. So I didn't really spend a lot of time playing the
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Page 72 Amerifirst. The comment about the market being overbuilt is definitely true. And this is a shared national credit. Somebody else had cooked up a deal and We bought into it. Michigan National was the lead on this. Q. Now do you recognize this document? A. Not really. I see what it is. I don't remember it specifically. Q. What is this document? A. It's a write-up to accept a compromise of a loan that was consrructed by the lead lender, Michigan National, on an office building in Maitland, Florida. I'm familiar with the area. Q. Do you recall William Sawchyn? A. I hate to admit it, I don't remember him either. Sawchyn I really don't remember. Bill Sawchyn. I vaguely remember the name. I can't place the face. Q. Would you concur with Mr. Sawchyn's opinion that Orlando was a tremendously overbuilt office space area? A. Definitely. We owned a giant hospital in the middle of downtown; one of the landmark buildings we foreclosed on. Q. That was in the Orlando area? A. Yeah. In Amerifrrst we had a lot of properties that were troubled. Q. And Carteret obviously had some properties there
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I as well? 2 A. I don't think as many as Amerifrrst, but there 3 were some. 4 Q. I want to ask you, on the second page there's an 5 indication of -- left-hand side toward the bottom there -6 the Carteret Savings Bank Credit Committee.
A. Yes. 7 8 Q. What do you recall about the credit committee? 9 A. It was a committee that voted on this. It was a 10 committee that voted on these kinds of proposals. 11 Q. Restructuring loans? 12 A. Yes. Compromises.
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Q. Who were the members of the committee?
A. Would have been me, Dick Bianco, I think Donald
15 Kramer. I'm not sure if Ron Burns was or not. I don't J 6 really remember. And it might have been the residential 17 guy, too. What was his name? McCabe. I think, but I'm not 18 19 20 21 22 23 24 25 sure. You have access. I don't remember it exactly. Q. Do you recall there being authority limits on what the committee could approve in terms of restructuring a problem loan? A. Well, the credit committee was the chairman of the board and board members -Q. Were there certain restructurings that had to go to the board level?
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A. That kind of was the board level. I know at least two of the board commiuee members were on the committee and I think we only had fOlJr members on the board, or five. Q. Who else had to make the decision? A. That was pretty much it. They had a lot of trouble attracting board members, as you can imagine. Q. Do you recall the credit committee's approval going to the board for the nltimale resolution by the board? A. It may have. r don't know what the threshold was. If it needed to be approved at the board, J guess somebody wonld have said it to us, but I don't recall. MS. TORNATORE: Let's mark this as Deposition
13 Exhibit 7. 14 (Whereupon, the documentteferred to was marked 15 for identification as Defendant's Exhibit Number 7.) 16 Q. Mr. Moor, I'll show you what we've got marked as 18 19
17 Deposition Number 7 with an ADores number of PAMOIO 1225. A. 1 see it. Q. Do you recognize Exhibit 7?
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20 A. No. 21 Q. Do you recall who Mr. Mudd was or, actually. we've 22 already discussed? 23 A. Jobn Mudd worked for me. He was the legal counsel 24 for the real estate group. And this was something he would 25 bave done.
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Page 97 something with the broker or Western. At intervention I don't know what the status of that was. I don't recall. MS.1DRNA1DRE, Let's mark Exhibit 12. (Whereupon, the document referred to was marked for identification as Deposition Exhibit Number 12.) Q. Mr. Moor, I'm going to show you what we've marked as Deposition Exhibit 12. Do you recognize Exhibit 12? A. No. Q. Can you describe Exhibit 12 for the record? A. Looks like the deposition that I gave to the attorneys in Newark back in '95. Q. And this statement was made to the RTC, the Resolution Trust Corporation? A. Excuse me? Q. This statement was made to the Resolution Trust Corporation? A. No, these were attorneys in Newark. I think they represented the RTC or they worked for the RTC. It's hard to remember. Q. On the second page of the document there it has an ADDIIS number, CAM357 2054. It kind of gives you an indication there of who the attorneys were present in the deposition. I just wanted to point that out. A. Now you're asking me to read something without my reading glasses. This is small print. Page 98
Q. I just wanted to point that out to
Q. Does that freah your recollection? A. Yeah, it does. I'd forgotten the particulars. I
guess I was smarter in 1995 than 1999. Q. Or perhaps it was just nearer in time? A. It was closer to it, obviously. Q. That might be it. Does it appear as though there was some recourse that Carteret could take against the broker? A. As 1 recall, there was talk about the broker. And I had forgotten there was two brokers. I guess there was two pieces of this, Goldman and DU and Western Federal. I think the opinion was it could be put back to all three. Q. In reading on through to Page 116 there, does that refresh your recollection as to when or if Carteret reclassified it as a commercial loan? A. I don't remember them reclassifying it. I really don't. I think it's pretty clear what I thought. Q. So it wasn't until about a y
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