WASHINGTON - The story of the failure of Superior Bank FSB features more than the warring ex-owners of the bank or regulators dodging blame. Behind the scenes is a cast of Washington insiders that includes a former lawyer for President Clinton, two ex-comptrollers, and two former general counsels of the Federal Deposit Insurance Corp.
Their roles have ranged from adviser to spin doctor for the Pritzker family and the New York developer Alvin Dworman, and their very involvement underscores the gravity of Superior's demise, and how hard some worked to prevent it.
Both the Pritzkers and the Dwormans - who each owned half of Superior's holding company - have been accused by regulators of walking away from a recapitalization plan that would have saved the $2.3 billion-asset Hinsdale, Ill., thrift. But neither group is taking that accusation lying down.
The Pritzkers have said publicly that the deal turned rotten since they signed it in May, with residual interests in a large number of subprime loans devalued by $200 million to $500 million - depending who is counting. A spokesman for the Dwormans said they were "prepared and committed to fulfill their obligations under this plan."
And each side has hired some of the top names among banking lawyers and beyond to boost its case.
Top on the Pritzker list is Washington is litigator and media coach Lanny Davis, a partner with the law firm Patton Boggs LLP, who became famous as a White House counsel during the Monica Lewinsky scandal. Mr. Davis has published an account of his experiences during that time, which includes his advice on how to combat bad press.
Mr. Davis, along with Joseph G. Passaic, a former senior attorney in the FDIC's department of resolution and receiverships, have been assisting the prominent Hyatt hotel chain owners weather the furor of the thrift's failure, the largest among depository institutions in more than two years.
Also involved was Jack Murphy, a former FDIC general counsel and a partner with the Washington law firm Cleary Gottlieb Steen & Hamilton, which assisted the Pritzkers with the recapitalization plan. The law firm of Williams & Connolly is handling possible litigation for the family.
For their part, the Dwormans have enlisted John L. Douglas, a former FDIC general counsel and an attorney at Alston & Bird in Atlanta, to assist with the legal issues raised by the failure. Mr. Douglas had helped Mr. Dworman with the recapitalization plan.
But Mr. Dworman can also turn to old friend John Heimann, a former comptroller of the currency and past acting FDIC chairman, who helped the developer when another bank he owned in the early 1990s seemed on the verge of failure. Though Mr. Heimann said he was not involved with Superior, he did take issue with news stories that mentioned the near-collapse of River Bank America, a New York institution better known as East River Savings Bank, which was controlled by Mr. Dworman and partly owned by the Pritzkers.
Last week the New York Times reported that East River nearly failed under the management of the Pritzkers and Dwormans because of risky real estate development loans before it was sold in 1996. But Mr. Heimann said that Mr. Dworman did not get enough credit for coming up with an innovative plan to keep East River from failing.
The New York Times story "was just wrong," said Mr. Heimann, who had previously been on the board of East River Savings. "It was not a failed bank. The FDIC never had to go near that bank, except to approve its sale. It was more of a success - a private-sector solution to a problem that many other organizations would go for the public-sector solution."
Additionally, before its failure, Superior turned to Eugene A. Ludwig, a managing partner of Promontory Financial Group and a former comptroller under President Clinton. Mr. Ludwig, along with Duncan Hennes, a former executive vice president of Banker's Trust, assembled a complex recapitalization plan that would have saved the bank. But that plan fell through when the owners purportedly walked away from it.
