Ex-Downey execs could lose savings

December 22, 2008
The Orange County Register (California)

The failure of Orange County’s largest independent thrift has cast doubt over whether some of its former managers will get savings the company was supposed to set aside for them.

Some former executives of Downey Financial and its subsidiary Downey Savings and Loan in Newport Beach said they put part of their pay and bonuses in a deferred-compensation plan and don’t know if they will get the $1 million or so back. The tax-deferred money is for retirement or other purposes.

The Federal Deposit Insurance Corp. seized Downey Savings last month and sold its deposits and branches to U.S. Bank. A few days later Downey Financial filed for bankruptcy.

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An FDIC spokesman was not immediately available for comment. Michael Menkowitz, an attorney with Fox Rothschild LLP in Philadelphia who is representing Downey Financial’s bankruptcy trustee, said his firm will look into whether Downey Financial is responsible for the compensation plan.

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Read the entire article at http://headlines.ocregister.com/news/downey_5951___article.html/plan_money.html.