FDIC Seeks $518M from Amtrust's Parent Firm

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FDIC Seeks $518M from Amtrust's Parent Firm 20100426-NEWS--1-NAT-CCI-CL_-- 4/23/2010 2:03 PM Page 1 $1.50/APRIL 26 - MAY 2, 2010 Ohio taxes FDIC seeks obstruct wind tech $518M from movement AmTrust’s Legislation aims to propel industry’s competitiveness parent firm By DAN SHINGLER [email protected] AmFin rebuffs liability; case may set precedent for accountability to feds When it comes to putting up turbines to turn moving air into elec- By ARIELLE KASS tricity, Ohio is sucking wind. However, [email protected] wind industry proponents hope leg- islation pending in the Statehouse The Federal Deposit Insurance Corp. claims it is owed will whip Ohio into shape this year. more than $500 million from the holding company of The legislation would enable the the former AmTrust Bank for failing to be a “source of state to play catch-up with neighboring strength” to the bank, a claim the FDIC and others say states that are well ahead in the race could have broad implications for banks nationwide. to develop wind power. It also would In pleadings related to the bankruptcy case of AmTrust better position Ohio to cement its Financial Corp. — now known as AmFin Financial Corp. place as a top wind industry supply — FDIC attorneys said by agreeing to a Nov. 19, 2008, state. cease-and-desist order that required the bank to have a If passed, the new law would lower prescribed amount of the taxes levied on wind turbines. capital, AmFin committed “It’s not a small The change would make Ohio more to keeping AmTrust Bank competitive with surrounding states, well-capitalized. matter. We’re which already have addressed the tax AmFin therefore should going to litigate issue with their own laws. NEED FOR SPEED be on the hook for at least over who gets the “While every neighboring state in $518.5 million, which was money.” the northeast quadrant has moved AmTrust Bank’s capital ahead with wind farm development, Efforts under way to accelerate residential, deficit as of Sept. 30, 2009, – Eric Goodman, Ohio has not,” said Brad Lystra, according to the FDIC. attorney, Baker manager of economic development commercial connection to faster Internet service After its parent company Hostetler for the American Wind Energy Asso- filed for Chapter 11 bank- ciation, the industry’s primary trade By CHUCK SODER ruptcy protection last Nov. 30, AmTrust Bank — which group. [email protected] now is known as Ohio Savings Bank in this area — failed The problem, Mr. Lystra and and was taken over by New York Community Bank last other industry proponents say, is Dec. 4 in a deal orchestrated by the FDIC. Ohio’s tax structure. rganizations and government Attorneys for AmFin disagree with the FDIC and A developer who puts up a wind agencies all across Northeast say the government agency is owed nothing. They turbine in Ohio can expect to pay Ohio are trying to add more lanes say the company made no promises to keep AmTrust about $40,000 in annual property Bank well-capitalized and that AmTrust Financial taxes. That same turbine in Michigan, to the information superhighway. noteholders and others should receive priority over Indiana, Pennsylvania and many OSeveral local groups are working on the government agency. other states would cost less than While the Office of Thrift Supervision, regulator of $10,000 a year in taxes, Mr. Lystra projects to make the region’s Internet faster AmTrust Financial and AmTrust Bank, asked the holding said, speaking last Tuesday, April 20, and get more people to use it, efforts driven See BANK Page 6 to a group of about 50 Northeast Ohio manufacturers who hope to in part by ever-increasing demands for supply the wind industry. bandwidth and an influx of federal stimulus ON THE WEB “Of all the states in the country money. Some projects focus on helping right now, in my opinion, Ohio is in Tune in with Crain’s a tight spot,” Mr. Lystra said. low-income people gain access to reason- This week’s podcast takes you further into the stories The result of Ohio’s current tax ably fast Internet service or teaching of Ohio’s wind policy is readily visible. Since 2008, market, the need for neighboring states have been building them how to use it. Others aim to give local improving high-speed wind turbines like Amish barns. residents and businesses that have good Internet access, the Indiana alone has put up 1,000 Internet connections even faster access. implications of the megawatts of wind power produc- See INTERNET Page 18 AmFin/FDIC quagmire and a boon in the housing market. tion in the last two years; its turbines Visit www.CrainsCleveland.com/podcasts. See WIND Page 9 SPECIAL SECTION 17 6 HIGHER EDUCATION NEWSPAPER Colleges boost tuition amid anticipated state Entire contents © 2010 71486 01032 financing cuts, inflation increase ■ Page 11 by Crain Communications Inc. Vol. 31, No. 17 0 PLUS: ETHICS ■ QUEST TO DIVERSIFY ■ & MORE 20100426-NEWS--2-NAT-CCI-CL_-- 4/23/2010 1:17 PM Page 1 2 CRAIN’S CLEVELAND BUSINESS WWW.CRAINSCLEVELAND.COM APRIL 26-MAY 2, 2010 COMING NEXT WEEK A DIFFERENT WORLD Crain’s will identify Women who work full time had median weekly earnings of $665 in the first quarter of 2010, or some of the top 78.8% of the $844 median for men, according to new federal government data. The gap between health care earnings of white men and white women was significantly larger than the female-to-male gap for other 700 W. St. Clair Ave., Suite 310, ethnic groups. Here’s how the data break down: Cleveland, OH 44113-1230 professionals Phone: (216) 522-1383 Fax: (216) 694-4264 and volunteers in www.crainscleveland.com its third annual Median Female-to- Characteristic Men Women Publisher/editorial director: Health Care Heroes weekly earnings male ratio Brian D. Tucker ([email protected]) section. 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Outside of Ohio: 1 year, $102; 2 years, $180. Single copy, $1.50. Allow 4 weeks for change of address. Send all subscription correspondence to Circulation De- partment, Crain’s Cleveland Business, 1155 Gratiot Av- enue, Detroit, Michigan 48207-2912. 1-888-909-9111 or FAX (313) 446-6777. Reprints: Call 1-800-290-5460 Ext. 136 Audit Bureau of Circulation 20100426-NEWS--3-NAT-CCI-CL_-- 4/23/2010 12:55 PM Page 1 APRIL 26-MAY 2, 2010 WWW.CRAINSCLEVELAND.COM CRAIN’S CLEVELAND BUSINESS 3 County advisers to tout land use strategy much more collaboration both was a deputy Cuyahoga County so-called brownfield land should Economic development workgroup: Cuyahoga within the county and between the administrator until he retired late receive public money for environ- county and surrounding counties,” last year. mental cleanup and for marketing plan would help identify best places to develop said Judy Rawson, a former mayor Mrs. Rawson and others in the tran- for redevelopment. A land use plan of Shaker Heights and a leader of sition leadership visited Allegheny even could restrict retail develop- By JAY MILLER The expectations won’t be satis- the drive to pass a county govern- County, Pa., which went through a ment in the county if the new devel- [email protected] fied at the first meeting, but don’t ment reform issue last November.
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