HomeMy WebLinkAbout14- Development Department —j6VELOPMENT DEPARTMENT
OF THE CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
REQUEST FOR COMMISSION/COUNCIL ACTION
I
FROM: KENNETH J.HENDERSON SUBJECT: AGENCY LOAN AND
Executive Director GUARANTEE TO STEWARD AND
ASSOCIATES-GAS COMPANY
BUILDING
DATE: August 31, 1994
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Synopsis of Previous Commission/Council/Committee Action(s):
The Commission has previously approved a loan to Steward and Associates for$350,000,a loan guarantee of$1.3
million and a bridge loan of approximately$138,000.
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Recommended Motion(s):
(Community Development Commission)
(Developer Recomendation)
r
MOTION: That the Community Development Commission approve the ninety day loan payoff extension submitted
by Steward and Associates in connection with its$138,000 bridge loan on the old Gas Company
Building located at 570 West Fourth Street.
4
Administrator HENNEkH J.HE RSON
Executive Director
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Contact Person(s): Kenneth J.Henderson/John Hoe eg r_ Phone: 5081
Project Area(s): All Ward(s): Seven(7)
Supporting Data Attached: Staff Report:
FUNDING REQUIREMENTS: Amount: N/A Source: N/A
Budget Authority: N/A
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Commission/Council Notes:
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KJH:gas:adw COMMISSION MEETING AGENDA
MEETING DATE: 09/06/1994
Agenda Item Number:
DE ±, LOPMENT DEPARTME T
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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Agency Loan and Guarantee to Steward and Associates- Old Gas Company Building
I
Previously, the Community Development Commission approved a loan to Steward and Associates
in the amount of$350,000 and a loan guarantee of approximately$1.3 million to acquire and
I renovate the old Gas Company Building located at 570 West Fourth Street. The agreement was
subsequently amended to provide bridge financing in the approximate amount of$138,000 as a
result of the Federal Deposit Insurance Corporation taking over Commerce Bank, Steward's
construction lender, and stopping loan disbursements during construction.
The bridge loan had an original term of ninety(90) days which was subsequently extended to
August 31, 1994. The outstanding loan balance is approximately $157,000 (with accrued
interest). Attached is correspondence from Alan Steward requesting an additional ninety(90) day
extension and detailing the reasons for same. Also attached to Mr. Steward's letter is a
memorandum from Charles R. Green, of Sabo and Green, to Timothy Steinhaus, Administrator,
Economic Development Agency, concluding, ..."that prosecution of Mr. Steward's claim is highly
unlikely to be successful...".
With the above in mind, the developer has requested the Commission approve an additional ninety
(90) day extension because, according to the developer, of the bright prospects for refinancing. A
successful refinancing would enable the developer to payoff both the original $350,000 loan and
the $157,000 bridge loan.
Based upon the foregoing, the developer recommends the adoption of the form motion.
(M r
KENNETH I ANDERSON,Executive Director
IDevelopment Department
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KJH:gas:adw COMMISSION MEETING AGENDA
MEETING DATE: 09/06/1994
Agenda Item Number: ��
si-�w.c�Ro
4& A S S O C/R T E S August 31 1994
COMMERCIAL REAL ESTATE
Mr. Tun Stemhaus
Agency Administrator
Economic Development Agency
201 N. "E" Street, 3rd Floor
San Bernardino, CA 92401
RE: 570 W. Fourth Street
San Bernardino, CA
Dear Mr. Steinhaus:
In regards to the loan due August 31, 1994, enclosed please find the letter from the FDIC
to verify what I am telling you. Also enclosed is the scenario from Charles C. Green
regarding our past experience with the FDIC.
I am requesting a ninety day extension on the loan as I am presently pursuing a discount
on the original note to American Commerce Bank, who was seized by the FDIC. The FDIC
is currently doing an appraisal on the building which will take approximately sixty days.
I feel there is a good possibility of having the note discounted from 1,300,000 to somewhere
in the neighborhood of 1,000,000.
Once the appraisal is back from the FDIC, new financing will be obtained on the building.
At that time I would pay not only the interim loan but also the $350,000 that was loaned
to me on the purchase, taking the City completely out of it. The City will remain a 25%
partner in the building. As you know on October 1, the rent for Concordia College goes
from $8,814.00 to $18,150.63.
1887 Business Center Drive, Suite 3
San Bernardino, California 92408
Tel. (909)381-9922 FAX(909)381-2481 j,
This building has been a struggle because the FDIC seized the building and we had to make
rent concessions of 50% rent for the first year in order to keep our tenants. We also have
invested in excess of$125,000 of our own funds to complete the tenant improvements and
maintain the building. We have succeeded in making it through our first year and the future
for the building is very bright.
Thanking�iou in advance, I remain,
Allan B. Steward
President, CEO
ABS/ks
encls
cc:Ken Henderson
I
lLI
FDIC '
`. ; Federal Deposit Insurance Corporation
e.'�,a' :.'�f P.O. sox 7549 Newpon Beach, CA 92658-7549 1714) 263-7100 ♦ FAX 1714) 263-7242
August 4, 1994
Mr. Allan Steward
Allan Steward, Inc.
c/o Steward and Associates
1887 Business Center Drive
San Bernardino, CA 92408
SUBJECT: AMERICAN COMMERCE NATIONAL BANK, 4576
Anaheim, CA - In Receivership
LAMIS No. 501121231
ALLAN STEWARD, INC.
Dear Mr. Steward:
k As discussed today, the terms of the above-referenced note called for an interest rate of
4% for the first year and an interest rate of Bank Prime plus l% for the remainder of the
note term, with interest payable monthly. Additionally, monthly principal payments of
$10,250 were to commence on April 2, 1994. The FDIC agreed to allow you to cure the
interest arrearage by paying $10,000 cash in December 1993 plus $2,000 over and above your
regularly scheduled monthly payment until the arrearage was brought current. It is
unfortunate that there was a misunderstanding over those terms and that the loan is still
in arrears.
The FDIC will consider a discounted payoff or loan workout/restructure offer to resolve _
t1- above-referenced asset. The basic criteria for a discounted payoff or workout is -
tncial distress, i.e. an inability on the part of the debtor or guarantor to honor the
t-.me of the obligation. The following information must be submitted to support any offer
other than full payoff:
1. Current personal financial statement for Allan and Kathleen
Steward (FDIC form enclosed) - notarized signatures
2. Current financial statement for Allan Steward, Inc.
3. Current financial statement for the guarantor, Redevelopment
Agency of the City of San Bernardino
4. Copies of federal tax returns for the debtor and guarantors
` for 1992 and 1993
5. Income and expense information for the collateral property
The information and offer must be received in this office no later than 5 p.m. on
September 15, 1994. In the event your offer requires takeout refinancing, a commitment
letter from the financial institution must be included in the information. If the
obligation is still delinquent as of that date and an offer supported by the required
information is not being considered by the FDIC, then collection action will recommence.
The FDIC will arrange for an appraisal on the collateral property and will provide Spencer
Browns name as the contact person. As discussed today, the appraisal information will be
confidential to the FDIC. The data will be used in our financial analysis of your offer.
The City of San Bernardino Redevelopment Agency will be sent a copy of this letter. Your
financial situation, the value of the collateral property and the financial ability of the
ILI
SABO & GREEN
A PEKJNW3Fd OVAL CO2POKATION
Al-MENZY8 AT LAW
F1T=H 400
6850 CAM)PGA AYTL-. tJm
WOODLAND kuL.L.S,CALIFORNIA 91397
18181 70"IL95
TELECOPI$R(918)""720
XzKomm
TO: Timothy C. Steinhaus
FROM: Charles R. Green
DATE: February 24, 1994
RE: FDIC Claim Relating to Al Steward owner Participation
Agreement; our File SBE00001-58
As requested, I have undertaken to review the factual
background and legal status of the claim which Al Steward asserts
should be made against the Federal Deposit insurance Corporation
("FDIC") in connection with his acquisition of that real property
located at 570 West 4th Street (the "Property") . As you know, the
Agency entered into an Owner Participation Agreement (00FA") with
Allan Steward, Inc. , whereby the Agency agreed to guarantee a loan
made by American Commerce National Bank (the "Bank") to mr. Steward
in the principal sum of $1,300,000, the proceeds of which were to
be used to purchase the Property from the Bank.
In addition, the Agency agreed to extend a loan of
$350,000 to Mr. Steward to assist in the renovation of the
structures located on the Property. Pursuant to the foregoing,
Mr. Steward acquired the Property and began renovation.
It appears from the documents which I have in my
possession that the Bank agreed to complete certain tenant
improvements on space leased to Concord Career Colleges and Inland
Counties Legal Services, as well as to credit Mr. steward with the
deposit of $18,724 from Concord career Colleges. The only document
which has been provided to me which reflects the Bank's obligation
to provide such tenant improvements is a letter dated February 17,
1 LL L7 J, Y..r'Y-i •• • •v
Timothy C. Steinhaus
February 24, 1994
Page 2
1993, from Robert G. Young, Senior vice-President. A copy of that
letter is attached hereto as Attachment I. I requested copies of
the purchase documents between tor. Steward and the Bank relating to
the acquisition of the Property, and both Mr. steward and Spencer
L. Brawn of Tri city Services, the individual acting as the agent
for Mr. Steward, have advised me that there are no additional
documents. Mr. steward indicates that there was no escrow, and
therefore no escrow instructions, nor was there any formal purchase
agreement.
Mr. Brown, acting on behalf of Mr. Steward, filed a claim
with the FDIC for reimbursement of $15o,000 of tenant improvements
which Mr. Steward alleges were expended for tenant improvements
that were the obligation of the Bank. on January 4, 1994, the FDIC
rejected that claim. A copy of the letter rejecting the claim is
attached hereto as Attachment 2. You will note that any legal
action seeking to overcome this disallowance must be filed within
sixty (60) days) from the date of the letter, or by March 4, 1994.
THA zs$II�
The issue presented is whether Mr. Steward has a claim
under Federal law for enforcement of the agreement of the Bank as
set forth in the letter of February 17, 1993. Following from that
issue, of course, is the subsequent issue of whether the Agency
would or should undertake to fund or otherwise participate in any
litigation to enforce such a right. As will be seen in this
Memorandum, I do not reach the policy issue of whether the Agency
should participate inasmuch as I conclude that the claim is not
valid in the first instance.
The United States Congress has provided a comprehensive
scheme for the operation of the FDIC, which is found at 12 U.S.C.A.
The provisions which deal with the expenditure of FDIC funds are
found at 12 U.S.C.A. Section 1823. More specifically, at
Section 1823 (a) # Congress has outlined the legal requirements which
pertain to any agreement which is asserted to diminish or defeat
the interest of the FDIC in any asset acquired by it. The full
text of 12 U.S.C.A. 1823 (e) is set forth as Attachment 3 hereto.
As you can see, in order to assert any agreement against
the interests of the FDIC, that agreement must meet four
requirements, which are as follows:
Timothy C. steinhaus
February 24, 1994
Page 3
1. The agreement must be in writing;
2. The agreement must have been executed by the
depository institution (i.e. , the Bank) , any pergqn clairnina an
adverse interest thpreunst (i.e. , Mr. Steward) , including the
obligor, and the execution of the agreement must have been
contemporaneous with the acquisition of the asset by the depository
institution;
3. The agreement must have been approved by the Board
of Directors of the Bank or its loan committee, which approval must
be reflected in the minutes of the Board or the Committee, and
4. The agreement must have been continuously, from the
time of its execution, an official record of the Bank.
The letter of February 17, 1993, upon which Mr. steward's
claim is founded, does not meet the prima facie requirements) of
Section 1823 (e) in the following respects.
1. Firstly, the letter cannot clearly be characterized
as an "agreement." While it is a written document, it appears to
memorialize an oral agreement rather than be an agreement in and of
itself.
2. Even if this letter can be characterized as an
agreement, it has not been executed by the person claiming an
adverse interest thereunder (i.e. , Mr. steward) .
3. The requirement is that this letter have been
written contemporaneously with the acquisition of the asset by the
Bank. In this scenario, since the Bank was selling the Property to
Mrr. Steward, the asset acquired by the Bank would appear to be the
promissory note and deed of trust made by the Bank as a purchase
money loan in favor of Mr. Steward, and which the Agency
guaranteed. The records provided to me do not include copies of
the purchase documents between Nr. Steward and thia Bank, and I am
therefore unable to determine whether the letter of February 17 was
executed contemporaneously with those purchase documents and the
note and deed of trust. If the letter from the Bank followed the
date of execution of the purchase documents, or even preceded the
execution of those documents, by any significant degree, then this
element of the requirement of Section 1823(e) has likewise not been
met.
4. The last two requirement®, which are that the
agreement have been approved by the Hoard of Directors or the loan
/ -r
Timothy C. steinhaus
February 24, 1994
Page 4
committee and have been continuously an official record of the
Bank, are outside the scope of our knowledge at this time. The
only way to determine whether these requirements have baen met
would be the discovery process undertaken in a litigation matter.
i
The FDIC has indicated that there is no such record.
In reviewing the Case law applicable to this situation,
I found further evidence of the lack of viability of Mr. steward's
claim. First of all, state law is preempted by federal statutes in
this area, and we can therefore look only to federal law and the
cases interpreting it.
The United States Supreme court has created a doctrine,
referred to as the "D'Oench Duhme Doctrine," which is a common law
theory applied by the courts to any agreement which tends to
diminish or defeat an interest of the FDIC in any asset acquired by
it. Section 1823 merely codifies that doctrine. The courts have
even gone beyond the bounds of Section 1823 (e) and applied this
broader common law theory to protect the FDIC against such
agreements.
The D'oench Duhme Doctrine provides that the FDIC may not
be held liable for a claim that is inconsistent with written
documents of a failed banking institution or is based on unrecorded
oral or written side agreements, and operates to bar both defenses
and affirmative claims for relief that would either diminish the
value of an insolvent institution or increase its liabilities.
Torke v. FDIC, D. Colo. 1991, 761 F. Supp. 754. The federal policy
of protecting the FDIC from such agreements is to assist the FDIC
in preserving the integrity of the banking system in the United
States. The primary purpose of the Doctrine is to allow federal
and state bank examiners to rely on the Bank'a regular and official
records in evaluating the worth of the Bank's assets. we
West Federal SAM,, a d Lo n Assn. , 1992, 12 Cal. Rptr. 2d 468. The
FDIC's actual knowledge or lack of knowledge of the agreement is
irrelevant. If the agreement meets the requirements of the statute
governing the use of side agreements, then it is valid even if the
FDIC did not know of the agreement. However, any agreement that
does not meet the statutory requirements fails even if the FDIC
knew of it. FDIC v, ar wer, S.D. Doss. , 1993, 823 F. Supp. 1341.
My analysis with regard to the nature of the "asset"
acquired by the Sank as being Mr. Steward's obligation on the
purchase money note is confirmed in the case of FDIC Y, 14Rnmttr
E.D. Ark. 19881 688 F. Supp. 1327, which found that a maker's
indebtedness on a note is an asset within the provisions of
Section 1823(c) .
Iq
Timothy C. Stsinhaus
February 24, 1994
Page 5
Mr. steward's reliance on a letter as a form of
"agreement" is negated in the case of Fra 1jn A alch Ltd,
partnership _Ys M s D.D.C. 1992, 794 F. Supp. 402, wherein the
Court found that an agreement to increase a loan amount was not
"executed" in the absence of formalities with respect to the making
and signing of contracts, including the signatures of all parties.
This is especially true in view of the fact that the criteria of
the D10ench Duhme Doctrine, as codified in section 1823 (e) , are
stringent and a failure to show satisfaction of each and every
requirement is fatal to every claim or defense. TaIno Y. 901C,
S.D. Fla. 1991, 782 F. Supp. 1538. Even "substantial compli.anca"
is not sufficient. ' , Ill. App. 1 Dist. 1993, 618
N.E. 2d 818. The District court is specifically prohibited from
attempting to balance the equitieg between the parties and is
required to apply the strict letter of the statute. FDrC vv._ TWT
ENploration Co. . Inc. , W.D. okl. 1985, 626 F. Supp. 149.
In one cage dealing with escrow instructions where an
individual purchased real property from a failed institution, the
court found that escrow instructions requiring the completion Of a
clubhouse on the real property were not binding on the government
because, among other reasons, the escrow instructions were not
contemporaneously executed with the loan documents, and were not
mentioned in the nestings of the savings and loan association's
board of directors or recorded in the association's records.
It should be noted that, while the Doctrine clearly
applies to breach of contract claims, it also applies to other
forms of claims. For example, a debtor attempting to assert
defenses of failure of consideration, estoppel and duress was not
permitted to use an alleged agreement with the lender because the
debtor could not show the basis for such defenses in writing from
the minutes of the board of directors or loan committee meetings.
There are a number of cases which find that fraud in the inducement
in connection with any loan or contract cannot be asserted under
the D'oench Duhme Doctrine, based upon the theory that bank
examiners would not be able to ob6erve such defenses in the review
of bank records. See, for example, In re 604 CoInatMA Ave, Rea v
, C.A. i (Mass.) 19920 968 F. 2d 1332.
Timothy C. Steinhaus
February 24, 1994
Page 6
Based upon the material which is presently available and
upon my understanding of the transaction as determined from those
documents and discussions with Agency staff, Mr-
Mr. and
Mr. Brown, it is my conclusion that this claim cannot be
successfully maintained in court. The sole basis presented to the
FDIC by Mr. Brown in support of Mr. steward's claim was the letter
of February 17, 1993. That letter clearly does not comply I
prima facie requirements of 12 U.S.C.A. Section 1823(e) , nor am
able to find any case law which would provide an exception to that
statute and the facts presented.
I therefore must conclude that prosecution of
Steward's highly
annotrocommand hat the Agency eith rYparticipatecinsor fund any
Such litigation.
53BO=I\VI uoa
z,24,94 zoo Iw
I
American Commerce
NA-noNAL BANK
3t1n0 East La Palma,ltentle•AndblKiM.Caliicxn,a 92807
Telephone: 1:714'610-4.500•Teleivc 1::1.1 630.1493
February 17, 1943
Arlan Steward, Inc.
268 W. Hospitality Lane
Suite 201
San Bernardino , Ca. 92408
Dear Kr . Steward:
This is to advise you that American Commerce National Bank has
agreed to the following e in
connection with your purchase of 570
West Fourth Street,
1 . Tenant improvements on space leased to Concord Career Colleges
and inland Countie' s legal Services will be completed by the
kbank with a Certificate of •occupancy obtained by the bank.
` 2. The deposit check of $18,720 .00 from Concord Career Colleges
f will be transferred to you within 72 bouts of closing the
transaction.
3. property taxes will be paid by the bank up to 2/19/93 .
If you have any questions please feel free to call.
Sincerely, t
Robert G. Young
Senior vice r sides
RGY7s1 t
cc! Gerald Garner
ATTACMMNT NO. 1
sa
FDIC
Federal Deposit Insurance Corporation
Cl21=JS&Wernents1CW$1r%98 C8panment 17141 Z6s-7100 FAX 17741 2p-7667
p.0.Bat 7649 Newport 8"ch,CA 92668-7549
January 4, 1944 LO
Spencer L. Brawn dba
TRi CITY SERVICES
104 East State St.
Redlands, CA 92373
Subject: 4576 American Commerce Bank N.A.
Anaheim, CA - In Receivership
Notl of 1J' al w rice f tai
Dear Mr, Brown:
On April 30, 1493, the American Commerce Bank N. A.
located in Ana helm, CA was closed
by Comptroller of the Currency, and the Federal Deposit insurance Corporation ("FDIC') was
appointed as Receiver.
Your claim on behalf of ALLAN STEWARD for $150,000.00 plus disallow your c elated the
has been reviewed by the Receiver. The Receiver has determined
following reason:
The letter agreement on which the claim he b� does�°smut R���rfQrm of the law.writing
12 USC Section 1823 (e) requires that � by eitlser
executed by the person cla'uning an interest thereunder; and have been approved
the book's board of directors or its loan �t=��� t''.e��C a�reemen PProv� Ye he
I Alean Stewat}d did not execute t1tC agreement.
loan committee or the Board of Directors, and was not reflected on its minutes of meetings.
�•E}t dicSat �tprmination
You have the right to seek judicial determination a nor�rd rig disallowance o you clai claim obtain
such review', you must file a lawsuit (or co p � the
district or territorial court or the United states for located district widlig which
United Status Distri Court for�the
Bank N.A.'s prutcipal place of bilsines
' District of Columbia, within SIXTY (60) days of the date of this letter.
ATTACHMFM N0. 2
. 4576 American Commerce tional Bank '
Spencer Brown/Allan Steward
page two of two
January 4, 1994
YOUR gAjLtMF,TO FILE SUIT (or mare the court to continue a prior pending action)
ON OR BEFORE MTX DAYS FROM THE DATE OF THIS DETER, WILL RESULT
YOU WILL HAVE I+iO FURTf[ER
EtiT YOUR CLAIM BEING FOREVER pA�, ,� YOUR CLAIM.RIGHTS OR 1
Your only means of review of the disallowance of your claim is to file a lawsuit as set forth
above.
The statutory provisions governing this claims process t� to obtain advice
rrom(dan ttorney
of Title 12 of the United States Code. You may
concerning the claims process; the FDIC cannot provide you with legal advice.
If u have any questions, please contact Marietta D. Bertumen at (714) 263-7662 or at the
Y'a
above address.
Sincerely.
Roberta Valdez
Department Head
operations C
14
PAGE 9
12 USCG s 1823
offerors;
(iv) prohibits discrimination o the basis of race, sex, or ethnic groups
rs
in the solicitation and consideration of offers; and
(v) maximizes the preservation of the availability and affordability of
residential real property for low- and moderate-income individuals.
(4) Loans
The Corporation, in its discretion, may make loans on the security of or may
purchase and liquidate or sell any part of the assets of an insured depository
institution which is now or may hereafter be in default.
(e) Agreements against interests of Corporation
No agreement which tends to diminish or defeat the interest of the corporatior
in any asset acquired by it under this section or section 1821 of this title,
depository t ginstitution,ashall be validragainstrthe Corporation unless such insured
agreement--
(1) is in writing,
(2) was executed by the depository institution and any person claiming an
adverse interest thereunder, including the obligor, contemporaneously with the
acquisition of the asset by the depository institution,
(3) was approved by the board of directors of the depository institution or
its loan committee, which approval shall be reflected in the minutes of said
board or committee, and
ab , s time of its execution, an official
record of the depository institution.
'f) Assisted emergency interstate acquisitions
(1) This subsection shall apply only to an acquisition of an insured bank or
holding company by an out-of-State bank [FN3MV] savings association or out-of-
State holding company for which the corporation provides assistance under
subsection (e) of this section.
(2) (A) Whenever an insured bank with total assets of $500,000,000 or more (as
determined from its most recent report of condition) is in default, the
Corporation, as receiver, may, in its discretion and upon such terms and
conditions as the Corporation may determine, arrange the sale of assets of the
bank in default and the assumption of the liabilities of the bank in default,
including the sale of such assets to and the assumption of such liabilities by
an insured depository institution located in the State where the bank in
default was chartered but established by an out-of-State bank or holding
company. Where otherwise lawfully required, a transaction under this
subsection must be approved by the primary Federal or State supervisor of all
parties thereto.
(B) (i) Before making a determination to take any action under subparagraph
(A) , the Corporation shall consult the state bank supervisor of the State in
which the in default insured bank [F'N4MV) was chartered.
(ii) The State bank supervisor shall be given a reasonable opportunity, and
0 ATTACIiM NT NO. 3
II
FDIC
Federal Deposit Insurance Corporation
P.O. Box 7549 Newport Beach, CA 92658-7549
lk (714) 263-7100 ♦ FAX(714)263.7242
~�F CG ��
August 4, 1994
Mr. Allan Steward
Alitn Steward, Inc.
c/o St&:yard and Associates
1887 Business Center Drive
San Bernardino, CA 92408
SUBJECT: AMERICAN COMMERCE NATIONAL BANK, 4576
Anaheim, CA - In Receivership
LAMIS No. 501121231
ALLAN STEWARD, INC.
Dear Mr. Steward:
As discussed today, the terms of the above-referenced note called for an interest rate of
4% for the first year and an interest rate of Bank Prime plus 1• for the remainder of the
note term, with interest payable monthly. Additionally, monthly principal payments of
$10,250 were to commence on April 2, 1994. The FDIC agreed to allow you to cure the
interest arrearage by paying $10,000 cash in December 1993 plus $2,000 over and above your
regularly scheduled monthly payment until the arrearage was brought current. It is
unfortunate that there was a misunderstanding over those terms and that the loan is still
in arrears.
FDIC will consider a discounted payoff or loan workout/restructure offer to resolve
,_j above-referenced asset. The basic criteria for a discounted payoff or workout is
financial distress, i.e. an inability on the part of the debtor or guarantor to honor the
.terms of the obligation. The following information must be submitted to support any offer
other than full payoff:
1. Current personal financial statement for Allan and Kathleen
Steward (FDIC form enclosed) - notarized signatures
2. Current financial statement for Allan Steward, Inc. .
3. Current financial statement for the guarantor, Redevelopment
Agency of the City of San Bernardino
4. Copies of federal tax returns for the debtor and guarantors
for 1992 and 1993
S. Income and expense information for the collateral property
The information and offer must be received in this office no later than 5 p.m. on
September 15, 1994. In the event your offer requires takeout refinancing, a commitment
letter from the financial institution must be included in the information. If the
obligation is still delinquent as of that date and an offer supported by the required
information is not being considered by the FDIC, then collection action will recommence.
The FDIC will arrange for an appraisal on the collateral property and will provide Spencer
Brown's name as the contact person. As discussed today, the appraisal information will be
confidential to the FDIC. The data will be used in our financial analysis of your offer.
T' City of San Bernardino Redevelopment Agency will be sent a copy of this letter. Your
i icial situation, the value of the collateral property and the financial ability of the
s----- �--- ---•�� .�• -v.
Page Two August 4, 1994
:antors will all be considered in analyzing the feasibility of your offer. it is
assumed that the Redevelopment Agency of the City of San Bernardino executed the guaranty
in good faith and is prepared to honor its obligation if necessary.
Please contact the undersigned at (714) 263-7192 to discuss this matter further if you
have any questions or comments.
Very truly yours,
412d�
Patricia Bolster
Credit Specialist
Ic Guarantors:
Allan and Kathleen Steward
Redevelopment Agency of the City of San Bernardino