RTC Cancels Contracts with Edgar Group
WASHINGTON - The Resolution Trust Corp. said it has terminated dealings with a company that failed to make adequate disclosures in its bids for RTC asset-management contracts.
The RTC said it would also begin an audit of the contracts it granted the firm, the Ralph Edgar Group of Lake Geneva, Wis. The Edgar Group has more RTC contracts - 11 - than any other single manager. In estimated value, $19.8 million in fees, the group ranks fifth behind such managers as NCNB Corp. and the J.E. Robert Cos.
The RTC said the Edgar Group failed to disclose that a property it owned in a foreclosure action in the 1980s caused an $88,000 loss to an Illinois thrift. The loss had to be absorbed by the Federal Savings and Loan Insurance Corp., when the thrift, Pathway Financial, was seized and sold to First Nationwide Financial Corp. in 1988.
Under the 1989 thrift reform law, contracts cannot be let to any organization that caused a substantial loss to a deposit insurance fund.
The Edgar Group also failed to disclosed it had been sued for fraudulent activity and it broke an agreement not to hire anyone who had caused a loss to an insurance fund, the RTC said.
The agency's investigation of the Edgar Group, under way since early this year, was initially reported by the American Banker on March 4. Ralph Edgar, head of the company, said then that he was unaware until recently of the apparent default and hadn't intended to defraud the RTC.