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With a $21 million settlement between former officers and directors of Southeast Bank and creditors now agreed upon, only two lawsuits remain against the former $10 billion Miami-based financial institution that failed in 1991. The settlement includes a direct cash payment to the Southeast estate of $9 million plus a release of creditor claims by former Southeast officers and directors that will yield an additional sum of $12 million to the estate. It was disclosed late last week before U.S. District Judge K. Michael Moore in Miami. “We are pleased that a fair result has been achieved,” said Jeffrey Beck, court-appointed trustee for Southeast Banking Corp. The settlement, which is subject to bankruptcy court approval, stipulates that neither side acknowledges fault or responsibility. As part of the settlement, former Southeast Chairman Charles J. Zwick retains the right to recover a claim of up to $320,000 for severance and other benefits from the Southeast estate. Other senior officers already have received severance packages, said Beck. Southeast was seized in 1991 by federal regulators in one of the largest bank failures in the country. About 85 percent of $380 million owed to creditors has been paid, but interest payment of another $220 million has yet to be paid. The former trustee, William Brandt, filed several lawsuits against former officers and directors, the bank’s former law and accounting firms and the bank’s former investment banker. Brandt resigned under pressure from creditors, who deemed his legal tactics too aggressive. The claims against former officers and directors were dismissed in 1997, but reinstated through appeal. The directors included such notable names as sugar baron Alfonso Fanjul Jr., former Ryder System chief executive M. Anthony Burns and late Burger King founder James McLamore. Miami lawyer Aaron Podhurst, who represents the directors, said the settlement puts an end to expensive litigation, estimated to cost millions. He said the directors’ insurance will cover the settlement. “I think it’s good to put an end to this litigation and put it behind these people,” he said. “In our view, the outside directors did nothing wrong.” Lawsuits against Steel Hector & Davis, the bank’s former general counsel, and Deloitte & Touche, its former accounting firm, for allegedly failing to disclose the true financial nature of the bank among other allegations, are still pending. “We’re preparing for trial,” said Beck. He would not estimate how much money creditors are seeking in those cases.

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