Account Holder Letters
IN
THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS
COUNTY DEPARTMENT, CHANCERY DIVISION
| IN THE MATTER OF THE POSSESSION | § | |
| AND CONTROL OF THE COMMISSIONER | § | |
| OF BANKS AND REAL ESTATE OF | § | Cause No. 00CH05905 |
| INDEPENDENT TRUST CORPORATION | § | |
| a/k/a INTRUST, an Illinois corporate fiduciary | § |
NOTICE OF HEARING ON ALLOCATION OF CASH TRUST FUND SHORTAGE
TO ALL ACCOUNT HOLDERS AND PARTIES INTERESTED IN THE AFFAIRS OF INDEPENDENT TRUST CORPORATION a/k/a INTRUST ("Independent"):
NOTICE is hereby given that the Court has set a hearing to determine the allocation of the cash trust fund shortage and implementation of such allocation with respect to the trust and fiduciary accounts of Independent for July 28, 2000 at 11 a.m. (CDT) in Room 2301, Richard J. Daley Center, 50 W. Washington, Chicago, Illinois ("Allocation Hearing").
NOTICE is also given that PricewaterhouseCoopers LLP, as Receiver for Independent, is preparing a written recommendation setting forth a proposed allocation of the cash trust fund shortage and implementation of such allocation ("Receiver Recommendation"), and that by June 23, 2000, the Receiver Recommendation will be filed with the Court and will be published on the Independent website at (www.intrust.com) for review by account holders and other interested parties.
NOTICE is also given that a copy of the Receiver Recommendation will be mailed by first class mail to account holders and other interested parties that advise the Receiver in writing that they do not have access to the Independent website and request a copy of the Receiver Recommendation.
NOTICE is also given that at the Allocation Hearing, the Court intends to consider the Receiver Recommendation, hear evidence, and issue a determination regarding the method of allocating the cash trust fund shortage and implementing such allocation among Independent account holders and the trust and fiduciary accounts administered by Independent, and that the Court's determination shall be binding upon all account holders, investment advisors, and all other parties interested in the affairs of Independent, and may affect their rights to assets in such accounts.
NOTICE is also given that the Court has directed that any objections or responses to the Receiver Recommendation and any arguments or positions that any person may want the Court to consider at the Allocation Hearing, must be in writing and must be filed with the Clerk of the Court, and received by the Receiver's general counsel (Kirkland & Ellis, Attn: Jonathan Silverman, 200 E. Randolph Drive, Chicago, IL 60601, fax no. 312/861-2200); on or before 5:00 p.m. (CDT) on July 14, 2000.
Dated: June 14, 2000
| PRICEWATERHOUSECOOPERS LLP, |
| AS RECEIVER FOR INDEPENDENT TRUST |
| CORPORATION |
In connection with the informal meeting for attorneys for interested parties described in the following order, please be aware that any attorney that attends must contact the following person no later than NOON (LOCAL CHICAGO TIME), MONDAY, JUNE 26, 2000: Mr. Andrew Groesch, Kirkland & Ellis, 200 E. Randolph Drive, Chicago, IL 60601 (312) 861-3299, Andrew_groesch@chicago.kirkland.com
The lawyer should be prepared to tell Mr. Groesch the lawyer's name, the interested party that the lawyer represents, and the names of any other lawyers to be attending the meeting. Lawyers who do not register may be excluded from the meeting.
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS
COUNTY DEPARTMENT, CHANCERY DIVISION
| IN THE MATTER OF THE POSSESSION AND | § | |
| CONTROL OF THE COMMISSIONER OF BANKS | § | |
| AND REAL ESTATE OF INDEPENDENT TRUST | § | |
| CORPORATION a/k/a INTRUST, an Illinois Corporate | § | No. 00 CH 05905 |
| Fiduciary | § |
ORDER
This matter coming to be heard before this Honorable Court and in connection with the Order Setting Hearing and Directing Method of Notice on Allocation of Cash Trust Fund Shortage with Notice Thereof (the "Scheduling Order") this additional Court Order is hereby entered and the Court being fully advised in the premises, it is additionally Ordered as follows:
1. It is Ordered that on June 27, 2000 at 10:00 a.m., the Receiver and its counsel shall meet with attorneys for any interested parties to discuss its report and recommendation and discuss the requests of any interested parties for discovery relating to the Receiver's report and recommendation and other matters of concern of the interested parties. The meeting shall take place at the offices of the Receiver's counsel, Kirkland & Ellis, 200 East Randolph Drive, Chicago, Illinois, 60601.
2. If the Receiver and interested parties are unable to reach agreement about what discovery, if any, should be made available to the interested parties and the timing thereof, the Receiver and the interested parties may file a motion with the Court seeking court orders on discovery and such motions shall be heard at 10:30 a.m. on June 30, 2000 before the Honorable Sidney A. Jones, III. A status report is also scheduled for that date and time.
3. This Order shall be included in the notices provided in connection with and pursuant to the Scheduling Order.
4. This Court Order is entered without prejudice to any discovery requests of any parties who have filed an appearance through counsel in this matter.
DATED: June 8, 2000 ENTERED:
/S/ Sidney A. Jones, III
JUDGE
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PricewaterhouseCoopers LLP, as Receiver
15255 S. 94th Avenue Orland Park, IL 60462-3897 (708) 873-5300 FAX (708) 873-5320
ACCOUNT HOLDER LETTER
April 17, 2000
Re: Independent Trust Corporation, a/k/a Intrust receivership proceeding, Cause No. CH05905
Dear IRA Customers, Trust Account Holders, Investment Advisors and Interested Parties:
On April 14, 2000, the Commissioner of Banks and Real Estate for the State of Illinois (the “Commissioner”) took possession and control of Independent Trust Corporation a/k/a/ Intrust (“Independent”). The Commissioner has placed Independent in receivership proceedings in the Circuit Court of Cook County, Illinois, Chancery Division (“Court”). PricewaterhouseCoopers LLP (“PricewaterhouseCoopers”) has been appointed as Receiver for Independent. The Receiver has taken possession and control of Independent’s assets and operations. PricewaterhouseCoopers is the world's largest professional services firm, and has significant experience handling matters such as this.
All funds and assets actually on hand as of April 14, 2000 and all funds and assets received by Independent after April 14, 2000 are now under the supervision of the Receiver. All uninvested trust cash will be held in institutions insured by the FDIC. These funds and assets will be protected and preserved for the benefit of trust beneficiaries.
THE PROBLEM
Prior to April 14, 2000, Independent invested the cash portion of trust assets through different agents and depositories. An examination by the Illinois Office of Banks and Real Estate revealed that a substantial portion of the trust cash that was placed with one of these agents was missing. One of our first priorities as Receiver will be to determine the amount of the trust fund shortage and how it may affect trust beneficiaries. As a result, it is not currently possible to calculate the exact loss in any given trust account.
Due to the apparent shortage in trust funds and until the Receiver has completed its initial investigation of the shortage, the Court has temporarily placed restrictions on the trust assets that existed on April 14, 2000. Until further notice the following restrictions are in place:
1. There can be no withdrawal from cash balances which purportedly existed on April 14, 2000 nor can there be purchases of securities using cash balances which purportedly existed on April 14, 2000;
2. There can be no transfers of accounts to other trust companies or other types of custodians;
3. Securities in accounts as of April 14, 2000 may be sold and the proceeds used to purchase other securities or held in trust accounts to be opened and controlled by the Receiver;
4. Proceeds from the sale of securities in accounts as of April 14, 2000 may also be withdrawn, but only if (a) securities remain in the account with a value of at least 50% of the value of the securities in the account on April 14, 2000 and (b) the funds are required for personal hardship purposes as reflected in a letter or other documentation satisfactory to PricewaterhouseCoopers, as Receiver.
These restrictions are necessary for a just and equitable resolution of the situation.
Independent, under the supervision of the Receiver, will continue its operations on a limited basis. Independent will continue to accept deposits from existing customers and such funds and assets will be segregated from trust funds that existed on April 14, 2000. Customers will be able to use the trust funds that are deposited after April 14, 2000 to the extent the deposited funds are not proceeds of pre-closing assets. Additionally, the account statements that were to be delivered in April 2000 will be delayed.
THE PLAN
The initial activities of the Receiver will include a preliminary verification of trust assets, ensuring the safety of all trust funds, stabilizing operations, investigating the amount and nature of the shortage, and resuming regular operations as quickly as possible. The Receiver will evaluate actions to minimize any loss to customers, including pursuing causes of action against those responsible for this shortage.
The Receiver also intends to immediately seek financially responsible purchasers for Independent’s business. Any sale or transfer of operations will require Court approval. The Receiver will attempt to negotiate a sale as soon as possible. A successful sale of Independent’s business as a going concern is the most likely method for reducing the existing trust fund shortage. To maximize the amount realized through such a sale, it is important that Independent retain as many of its existing customers as possible. Significant losses of customers may well reduce any purchase price for Independent's business and, therefore, reduce the recovery to customers. Although the Receiver will act diligently to conclude a sale, there can be no assurance that a sale can be completed or the sale price will be sufficient.
In addition, the Receiver has closed the branch office at 120 West Madison Street, Suite 614, Chicago, Illinois and consolidated such operations at the main office at Orland Park, Illinois. Any future communications and dealings with the West Madison branch should be directed to the main office.
CLAIMS PROCEDURE
At this point, a formal procedure for filing a claim against Independent has not been established by the Court. Therefore, it is not necessary for you to file a claim at this time. You will be notified as soon as this procedure is in place, and an opportunity to file a claim will be provided to all creditors.
FUTURE COMMUNICATIONS
As the cost of sending written communications to each customer and interested party is quite substantial, it is anticipated that letters such as this will be made in conjunction with the mailing of account statements. For more frequent updates, please visit Independent's web site at www.intrust.com.
Your cooperation, assistance and understanding during this period of transition is appreciated.
Sincerely,
PricewaterhouseCoopers LLP, as
Receiver for Independent Trust Corporation
By: Lawrence A. Ward, for the Receiver