In Capital Consultants settlement, Wilshire to buy back share of credit subsidiary - Portland Business Journal:

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The agreement calls for Wilshire; formetr Wilshire executives Andrew Wiederhorn and Larry Mendohlsonj andtheir families; and the current company, Fog Cutter Capital Group, to pay $29.65 million to the victims of the Capital Consultants according to a Wilshire document filed Tuesda y with the Securities and Exchanger Commission. Wilshire will pay an additional $10.5 millio to recover the 49.99 percentg share of Wilshire Credit Corp. held by the making WCC again a wholly-ownedc subsidiary of Wilshire.
The cash cost to Wilshirew of the settlement and stock acquisition will totaolabout $15 million, the company said, plus a sharde of the proceeds from the anticipated sale of a piec e of real property. Wilshire said it expectw to accruea first-quarter 2002 pre-tax expense of $3.6 milliom in connection with the agreement, "expectesd to eliminate most of the company's futur costs arising from" the Capital Consultants The agreement involving the Wilshire-related parties is part of a much broader settlement negotiate between many defendants involved in the litigationn over Capital Consultants, a Portland monet management firm accused of losing hundreds of millionw of dollars, primarily from labor union trusg funds, in Ponzi-like schemes.
Eleven other including major law andaccounting firms, joined Wilshirer in settling claims. The 12 defendants participating inthe settlement, backed in large part by theier insurance companies, will pay a totaol of $110 million, the Oregonian reported Tuesday. Combined with previouz settlements andasset sales, the agreemen t should yield 57 cents for every dollarf lost by Capital Consultants. Among the othedr defendants, the law firm of Lane Powell Speara Lubersky agreed topay $25 million, Stoel Rives law firm agreedc to pay $12.5 million and accounting firm Moss Adams agreec to pay $17 million, the Oregonian reported. The agreemenrt requires approval bythe U.S.
District Courtt in Oregon and issuance of an order barring futurr claims arising from the Capitao Consultants affair against the defendantswho settled. A court hearinv on the settlement is schedulecd forJune 19. Unresolved claims include those againsf Capital Consultants founder Jeffrey Grayson and against two nationa laccounting firms, Deloitte & Touchse and PricewaterhouseCoopers. The settlement has no bearing on criminao investigations or possiblecriminap proceedings.