Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.misc From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: First American trustee axes Katzenbach, Davis Date: Wed, 18 Nov 92 16:10:35 EST Message-ID: \SE C;MONEY \HD First American trustee axes Katzenbach, Davis \BY David R. Sands \CR THE WASHINGTON TIMES Ending a protracted power struggle, the court-appointed trustee charged with selling the District's troubled First American Bankshares Inc. yesterday removed board Chairman Nicholas deB. Katzenbach and Chief Executive Officer George Davis. Trustee Harry W. Albright Jr., a lawyer and former New York state banking superintendent, overhauled the board of both First American and its parent company, First American Corp. The new boards then named former Maryland Sen. Charles Mathias, a longtime First American board member, as chairman and Paul G. Adams, who was executive vice president, as president and CEO of the $6.1 billion bank. "There were some fundamental policy differences that created a certain amount of tension, primarily connected with the sale of the bank," said First American spokeswoman Iris Wordsworth. The shakeup comes at a delicate time for First American, which has been rocked over the past two years by heavy real estate loan losses and by revelations of its secret ties to the now-defunct Bank of Credit and Commerce International. Federal regulators ordered the bank's Middle Eastern shareholders to sell the bank by summer, and several prospective buyers are right now going over First American's books to decide whether to make a bid. There were evident tensions between Mr. Albright and Mr. Katzenbach and Mr. Davis. The trust agreement approved in May gave Mr. Albright complete oversight of the sale, as well as the right to fire the bank's management if he believes it is in the shareholders' interest. But Mr. Davis maintained that his management team would play a key role in initiating and directing the First American sale, telling reporters this summer, "The trustee's role is to approve the sale of the shares." In a statement, Mr. Mathias said the "change in command is appropriate and in the interests of depositors, employees, shareholders, the community served and the federal government, all of whom have significant interest in the future of the bank and its sale." Saying he spoke for the new board and the trustee, Mr. Mathias added, "We believe that we have a strengthened capacity to deal with issues of public confidence, to maintain the morale of our own dedicated bank managers and staff, and to effect the timely and successful sale of the bank." Ms. Wordsworth said the changes will not affect the timing of the bank sale, which includes the strong First American Bank franchises in Virginia, Maryland and the District. Dillon Read, First American's investment banker, will continue to work with the bank on the sale. Mr. Davis, a strong-willed former top Citibank official, joined First American just 11 months ago. The bank has made some progress in shedding subsidiaries and stabilizing deposit outflows, and even managed a slight profit in the second quarter of this year before slipping back into the red with an $8.3 million third-quarter loss. Mr. Mathias yesterday expressed the bank's appreciation for Mr. Katzenbach "having served the bank at a critical time in its history." This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM