The Metropolitan Mortgage & Securities investors' trust has agreed to a $30 million settlement with an accounting firm accused of making...
SPOKANE — The Metropolitan Mortgage & Securities investors’ trust has agreed to a $30 million settlement with an accounting firm accused of making mistakes that led to the financial conglomerate’s downfall.
The settlement marks the first time PriceWaterhouseCoopers has agreed to pay for its role in the Spokane company’s demise, The Spokesman-Review newspaper reported Sunday.
Lawyers for the trust and PriceWaterhouse were to brief U.S. District Judge Fred Van Sickle on the settlement this morning, when a 20-day trial had been scheduled to start.
If the settlement is approved, the money would be disbursed among thousands of investors who got burned when Metropolitan went bankrupt four years ago. Most were Northwest retirees who held more than $460 million in unsecured bonds called debentures.
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No other details about the settlement were immediately available.
The investors’ trust had sought to blame PriceWaterhouse for Metropolitan’s collapse, alleging the accounting firm violated its duty as independent auditor in 1999 and 2000.
The trust claimed PriceWaterhouse helped Metropolitan hide significant financial failings and its poor preparation to enter the high-risk commercial-lending business.
The trust alleged PriceWaterhouse concocted an offshore investment scheme that turned out to be a cleverly disguised tax shelter for Metropolitan, which wound up falling apart under an Internal Revenue Service crackdown.
The settlement does not resolve a class-action lawsuit investors brought against PriceWaterhouse.
The trust’s arbitration case against Ernst & Young, the auditing firm Metropolitan hired after firing PriceWaterhouse, also is pending.