Posted 5/13/2014 04:48 pm
Updated 6 months ago
The U.S. government is on the brink of releasing more than $3 million seized from a life insurance payout after the death of Layton "Scooter" Stuart.
The money will go to One Bank & Trust of Little Rock, where Stuart was removed as chairman, president and CEO less than six months before his death in March 2013.
The money represents premiums the bank paid to keep a John Hancock Life Insurance Co. policy in effect. The cash is part of a $17.7 million payout that federal authorities forced the insurer to turn over to the U.S. government for safekeeping in July.
The move prevented the insurance money from flowing to trusts set up for the benefit of Stuart’s wife and two adult children. The seizure was part of $17.8 million asset forfeiture action last year that included cash and cars linked to Stuart.
One Bank and the executor of Stuart’s estate, Richard Torti, have battled over the payment for months. One Bank has said it is owed $3.5 million. Torti and the government have said One Bank shouldn’t receive any more than $3,026,010.
In a filing Wednesday in the U.S. District Court’s Eastern District, One Bank agreed to the lesser judgment.
The item is on a laundry list of financial claims One Bank has made against seized assets associated with Stuart's alleged string of self-dealings at the bank.
The release of the money comes at a good time for the bank, which has seen its equity capital steadily erode amid quarterly losses during the past few years. Total equity capital at the $377 million-asset lender stood at $13.7 million as of March 31.
One Bank reported a nearly $1.1 million loss during the first quarter of 2014. The bank also recorded a net write-off from its loan loss reserves of $658,000.