Venture Financial Group, the one-time parent company to the former Lacey-based Venture Bank, has filed Chapter 7 bankruptcy protection in the U.S. Bankruptcy Court for the Western District of Washington.
Venture Bank was closed four years ago during the thick of the recession and banking crisis
The October filing shows that Venture Financial has about $7 million in assets and $40 million in liabilities. Among its creditors are former executives of the company, including Ken Parsons, chairman and chief executive of Venture Financial and Jim Arneson, the president and chief executive of Venture Bank.
It was not immediately clear Monday why the bank-holding company would seek bankruptcy protection after its primary asset, Venture Bank, was closed by state banking regulators on Sept. 11, 2009, and then sold by federal regulators to First Citizens Bank & Trust Co., of North Carolina.
A spokesperson with the U.S. Trustee’s office could not be reached.
The filing also doesn’t appear to be tied to an earlier class-action lawsuit in which former employees sued Venture Financial in December 2009, seeking to recover about $12 million in employee stock ownership and 401(k) retirement plans.
Although Venture Financial’s stock was not publicly traded, it was valued at $18 a share at the end of 2007. From June 2008 until year’s end, it fell from $14 a share to 25 cents a share, according to the lawsuit. Company stock in the employee stock ownership plan was valued at $6.6 million and company stock in the 401(k) plan was valued at $5.3 million at the end of 2007.
Seattle-based Hagens Berman attorney Andrew Volk, the lead attorney in the class-action suit brought by two Olympia women, Sandi Wilson and Synthia Lisi, against Venture Financial, said Monday that the case was settled in April 2011 for $750,000.
Volk said the settlement total reflected the fact that the judge dismissed part of the case. After fees and administrative costs, about $500,000 was distributed among 260 people, he said.
That’s about $1,900 per person.
Meanwhile, the bankruptcy filing shows that Parsons, as a creditor, is owed $4.4 million in retirement payments pursuant to a supplemental executive retirement plan, and $89,000 in deferred director income. Arneson, too, is owed about $570,000 as part of his supplemental executive retirement plan obligation, the filing shows. Claims for both Parsons and Arneson are identified as unsecured nonpriority claims, according to the filing.
Venture Bank was formed in 1979 and over the next 30 years would grow to become a $1 billion bank, but it stumbled during the housing crisis.
One of the biggest blows to the company came in late 2008. Venture Financial had invested in preferred shares of Freddie Mac and Fannie Mae, but after the federal government stepped in to take over the mortgage giants — because of concerns about losses at both Freddie and Fannie — the preferred shares fell in value, resulting in a Venture Financial pre-tax loss of about $40 million.
Venture Bank would close about a year later.Rolf Boone: 360-754-5403 firstname.lastname@example.org