$2.3 million after losing a court fight with the big finance firm. The $3 billion-asset bank had incorrectly retained funds that should have gone to Chrysler Credit, the floor plan financier of a failed car dealership, which was also a customer of the bank, a New Orleans court ruled. Whitney National and Chrysler Credit had been fighting for three years over who should receive the money, which were proceeds from 176 car sales made before the car dealership, called Toyota of Jefferson Inc., failed five years ago. "We contended that our security interest took precedence over Chrysler Credit's," said Susan Koch, senior vice president and director of marketing of Whitney National. "We didn't know that they were paying us off with money that should have gone to Chrysler Credit." The bank said it had set aside reserves in case it lost the case, so earnings will not be affected by the court's decision. Whitney National had appealed the original 1992 jury decision, but the Fifth Circuit Court of Appeals, located in New Orleans, upheld that verdict. Whitney National does not plan to appeal the decision at this point, Ms. Koch said. The court found the bank guilty of conversion and conspiracy to commit conversion claims. It rejected the charge that the bank had conspired to defraud Chrysler Credit. The conversion charges essentially mean that Whitney National had retained payments to cover its own loans and accounts with the dealership, when in fact, those funds should have gone to Chrysler Credit. The case stemmed from payments made by the Toyota dealership in the final days before its failure in the fall of 1990. For an 18-month period before it filed for bankruptcy, the dealership constantly overdrew on its general operating account, which was held by Whitney National. Whitney National nevertheless honored the checks made to Chrysler Credit - which had purchased the cars for the dealership and was therefore the rightful owner of the cars - until the overdrafts amounted to more than $1.6 million. The bank finally refused to honor the checks, causing the dealership to file for bankruptcy the next day. Whitney National is still owed about $3.7 million from the trustee that now controls the assets of what was once Toyota of Jefferson. That amount consists of a $1 million payment the bank made to the trustee to obtain creditor rights and a $2.7 million Chrysler claim transferred to Whitney National. The bank estimates it will get about $1 million of that back. It has already received about $125,000. The dealership has since been sold to a Houston company and is called Lakeside Toyota.

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