A federal district court judge last week ruled that Bank One Texas-not the government-owns the expensive furniture and equipment of a failed Texas bank it bought in 1989.
In the latest phase of a six-year legal battle, Judge Sidney A. Fitzwater determined that the equipment was among the assets of the failed MBank NA, which Bank One bought from the Federal Deposit Insurance Corp.
The FDIC has argued that it owned the equipment, which includes escalators and vaults from MBank's former headquarters. The agency said a complicated contractual clause cited by Bank One-under which MBank automatically purchased the equipment from a leasing company before the bank's failure-was not enforceable. The judge disagreed.
The FDIC also argued that even if Bank One did own the property, it owed the agency for it. That's because the property was not listed on the balance sheet when Bank One bought MBank. As a result, the FDIC argued, the agency's deal with Bank One was too generous. Judge Fitzwater also rejected that claim.
"My client has been fighting this battle for six years, and we're relieved to have finally received a court order saying what we have believed all along," said Michael P. Lynn, an attorney for Dallas-based Lynn Stodghill Melsheimer & Tillotson, which represented Bank One.
An FDIC spokesman said the agency had not decided whether it would appeal. Bank One Texas is a Dallas-based subsidiary of Banc One Corp., Columbus, Ohio.