Bank Pasifik Kidul - Torrance, CA Bank Gagal - Episode 332

**Freesia Brindisi** (0:01)
Good afternoon, good afternoon. Thank you so much for joining me. This is the podcast, The Endurance of Labor Laws. I'm your lovely host, Freesia Brindisi. Today is episode 332, and we're going to take a look at another failed bank. But before we dive in, let me give a big shout out to my listeners because as usual, you guys are awesome. So a big shout out to Florida, British Columbia, New Jersey, Pennsylvania, Illinois, Texas, New York, Oklahoma, Virginia, and California. In terms of countries, Australia, Bangladesh, the United Kingdom, the Russian Federation, Canada, Sweden, Singapore, China, and the United States. Okay. So today we're taking a look at another failed bank. This one is Southern Pacific Bank of Torrance, California. So this one was located in Torrance, California. It was acquired by Beal Bank and that's B E A L Bank. This one failed February 7th in the year 2003 So we're moving to the next year. In terms of the background information, this is directly from the FDIC.gov website. It says on February 7th, 2003, Southern Pacific Bank of Torrance, California was closed by the California Division of Financial Institutions and the Federal Deposit Insurance Corporation, also known as FDIC, was named receiver. As receiver, the FDIC is charged with winding up the business affairs of the failed financial institution. This includes the disposition of assets and liabilities of the failed financial institution and payment of dividends to approve creditors in order of priority. The FDIC as receiver has taken all necessary actions to conclude the affairs of the failed financial institution, made all dividend distributions as required by law, and the receivership estate is deemed terminate. Now, again, if it's not required by law, in terms of dividend distributions, then they're not going to do it. That's just how it is. In terms of a press release, it says the FDIC has issued a press release about the institution's closure. If you represent a media outlet and would like information about the closure, please contact the FDIC Public Affairs Office at 202-898-6993.
I was able to get a copy of the actual press release. This was released from the FDIC, the Federal Deposit Insurance Corporation, on February 7th, 2003 The media contact is David Barr, telephone number 202-898-6992.
It does give his cell 202-262-8743.
It reads, FDIC approves the assumption of the insured deposits of Southern Pacific Bank of Torrance, California. This was for immediate release. The Board of Directors of the Federal Deposit Insurance Corporation, also known as FDIC, approve the assumption of the insured deposits of Southern Pacific Bank in Torrance, California by Seal Bank, SSB of Plano, Texas. Southern Pacific, with total assets of, wow, $1 billion, was closed by the California Commissioner of Financial Institutions, and the FDIC was named receiver. Beal Bank has agreed to assume approximately $834 million of insured deposits of the failed bank. At the time of closure, Southern Pacific had approximately $30.7 million in deposits in 938 accounts that exceeded the federal deposit insurance limit. The failed bank's three offices will reopen as branches of Beal Bank. Deposit customers of Southern Pacific will automatically become depositors of the assuming bank. All depositors will continue to have immediate access to their insured funds. Customers with more than $100,000 on deposit at the failed bank should contact the FDIC toll-free at 1-866-308-4470.
So again, if you have to contact them, it's probably not a good thing. Well, you should contact them, but I'm saying like you're probably getting screwed out of your money because of what this bank did.
And it gives specific hours of when the FDIC is open in terms of Pacific Standard Time. Moving on, it says Beal Bank has agreed to pay the FDIC a premium of $500,000 to assume the insured deposits and purchased approximately $201.5 million of the failed bank's assets. That's quite a bit. The FDIC estimates the cost of this transaction to the Bank Insurance Fund, also known as BIF, will be $134.5 million.
Southern Pacific is the first financial, or sorry, first failure of an FDIC insured institution this year. That was back during that year and the first in California since Monument National Bank Ridgecrest was closed on June 2nd in the year 2000 Of course, this was over 20 years ago. So moving on, in regards to the acquiring financial institution, it says all insured deposit accounts were transferred to Beal Bank SSB of Plano, Texas and were available as usual during regular business hours at the former Southern Pacific Bank branches. It says that you can contact Beal Bank at 6,000 Legacy Drive in Plano, Texas 75024
Their telephone number is 469-467-5000.
In terms of the priority of claims, as usual, the dividend process is complete. In accordance with federal law, allowed claims are paid after administrative expenses in the following order of priority. So again, if your claim is not allowed, you're not getting paid and hopefully the administrative expenses are not going to be a lot, but considering that this is a billion dollars worth, it's probably going to be a lot, which is not good that this bank failed. It's actually really quite bad, but it doesn't surprise me that it was in California because California has been corrupt for a really long time. In terms of the order of priority of claims, number one is depositors, number two, general unsecured creditors, number three, subordinated debt, number four, stockholders. Again, in terms of the dividend information, I'm not going to read that because it's just a spreadsheet. In terms of the receivership termination, it says the FDIC as receiver for Southern Pacific Bank in Torrance, California, has taken all necessary actions to terminate the receivership estate. The receiver published a legal notice of intent to terminate the receivership in the Los Angeles Times on October 1st, 2008 The receiver has made all dividend distributions required by law. So again, if it is not required by law, it's not going to happen, especially at a federal level. And then in California, their state laws are kind of weird and tricky. So I don't even know if they would honor their state laws in regards to this, because California tends to be squirrely. And that's just how it's been for a really long time, unfortunately. And I pray that that stops. I pray that they stop being squirrely because it's not good. But as long as they keep voting in weird people, like some strange Democrats, then they're always going to have issues. It says, effective December 16, 2008