RTC Seeks Comment on Plan to Bar Some Potential Buyers
WASHINGTON -- The Resolution Trust Corp. is seeking public comment on a proposal to disqualify some potential buyers of failed thrift assets.
Under the plan, which follows legislative guidelines, a former borrower who contributed to losses of $1 million or more at a thrift and engaged in fraud would be ineligible to buy RTC assets. So would any officer or director who contributed materially to substantial losses or embezzled funds.
Also proposed were limits on who would qualify for RTC-assisted financing for asset purchases.
Though the board voted to seek comment on the proposal, members voiced considerable concern. "I would have thought fraud alone would be a basis" for prohibiting asset sales, said board Chairman L. William Seidman. And Comptroller of the Currency Robert Clarke said he would like far stricter standards.