First American: Drop Trustee Idea; Bank Lobbies Regulators to Allow It to Oversee Sale
Representatives of First American Bankshares Inc. are lobbying federal regulators to drop their plan to name an independent trustee to sell the bank, arguing instead that the bank's management should be allowed to handle the sale, sources said yesterday.</br></br>It has been more than a year since federal regulators ordered that the 60 percent of First American Bankshares that was illegally acquired by the Bank of Credit and Commerce International (BCCI) be sold. Because it is unclear who owns many of those shares, the Federal Reserve Board, First American and the liquidators of BCCI in August endorsed the general concept of an independent trust to hold the disputed shares and of a trustee to oversee the sale of the bank. However, the parties have been wrangling for months over what form the trust would take.</br></br>Federal banking regulators and law enforcement officials were prepared to sign documents creating the long-awaited trust last week, putting the stock owned by BCCI into the hands of Harry W. Albright Jr., a former New York banking commissioner, who would act as the trustee.</br></br>But when First American officials found out about the deal, they were stunned that they had not been consulted about the most recent attempt to create a trust, sources said. First American then hired John B. Hawke Jr., an attorney at Arnold & Porter and former general counsel at the Fed, to lobby the agency on its behalf regarding the trust.</br></br>That means Virgil Mattingly, general counsel at the Fed who is personally handling the trust issue, is being lobbied by the man he once worked for. Hawke has told the Fed that the power to sell the bank should be put in the hands of Nicholas deB. Katzenbach, chairman of First American, sources said. Both Mattingly and Hawke declined to comment. Katzenbach did not return phone calls for comment.