Ginnaven Stays Busy During Reprieve

With an important hearing on the horizon, Fayetteville attorney Robert Ginnaven has used an unexpected reprieve to his advantage, hoping to add more ammunition in his client’s ongoing fight against Metropolitan National Bank.

Ginnaven, on behalf of Tom Terminella and Grand Valley Ridge LLC, filed a number of responses on March 1 with the Washington County Circuit Clerk’s office to pending motions by MNB. Included was an affidavit from an expert witness who paints a bleak picture of MNB.

In the affidavit, Bill Welch, a CPA and 31-year banking industry leader from Texas, offered his analysis of the financial condition of the bank from 2004 through present. Welch provides expert testimony in a variety of cases, including claims related to a lender’s liability.

MNB lawyer Phil Kaplan previously deposed Welch in July 2008.

“Bill Welch offers his expert opinion that Metropolitan National Bank’s unsafe and unsound banking practices, including credit risk management and concentration risk management, extended back into 2006,” Ginnaven’s brief notes. “And that the bank was a ‘troubled bank’ as early as 2006.”

The brief continues, “Bill Welch has offered his expert opinion, based upon the public call reports filed by the bank, that Metropolitan National Bank improperly bunched its loan losses recognized in 2009.”

Welch’s key opinion is that MNB represented it’s financial condition by overstating the net loss in 2009, overstating net income reported in 2008 and overstating net income reported in 2007.

That is lying to the federal government, and to the public, as far as Ginnaven can tell.

A hearing before Washington County Circuit Judge Kim Smith is scheduled for March 11 at 10 a.m. It was originally scheduled February 17 but postponed the day before. Smith ruled in favor of MNB in February 2009 in a bench trial. Ginnaven has since been singularly focused on a new trial, this time by jury.

As reported previously, Terminella sued Metropolitan of Little Rock in Washington County in 2007, alleging breach of contract and bad faith by the bank. The developer sought $50 million in response to the bank’s foreclosure on two loans worth $14.4 million.

Following Judge Smith’s decision, separate suits filed in Benton and Pulaski counties were dismissed in February 2010.