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RESOLUTION TRUST CO. v. BURKE

November 21, 1994

RESOLUTION TRUST CORPORATION, Petitioner,
v.
JON BURKE, ROBERT B. GILLAM, and EUGENE REED, Respondents.



The opinion of the court was delivered by: CHARLES R. RICHEY

 UNITED STATES DISTRICT JUDGE

 INTRODUCTION

 On September 2, 1994, the Petitioner, Resolution Trust Corporation ("RTC") filed a Petition for Summary Enforcement of Administrative Subpoenas Duces Tecum served upon Respondents Jon Burke, Robert B. Gillam, and Eugene Reed in the RTC's investigation regarding Home Savings Bank, Anchorage, Alaska ("Home Savings"). The parties filed respective oppositions and replies thereto, and the Court held a hearing on October 7, 1994. At the hearing, the Court instructed the RTC to file a modified subpoena in light of the Court's discussions with counsel, and counsel's discussion with each other during a Court recess, regarding the applicable law and the facts of this case. The RTC filed a modified subpoena on October 18, 1994, the Respondents again filed an opposition, and the RTC again filed a reply.

 In view of the train of papers unexpectedly filed following the hearing on October 7, 1994, the Court held a status conference on November 15, 1994, at which time the parties stipulated that the only contested items of the modified subpoenas were those numbered one and two, and that the record would be closed as of that date. The Court took the matter under advisement.

 Accordingly, now before the Court for review are the following modified subpoena requests only:

 
1) A current financial statement that reflects [the Respondents'] current income, assets (whether wholly owned, jointly held, held by another person for [the Respondents'] use or benefit or otherwise), and liabilities.
 
2) Federal and State tax returns for the last three years.

 In their Joint Response to the Resolution Trust Corporation's Proposed Order Enforcing Modified Subpoena Duces Tecum, filed October 20, 1994, and at the status conference on November 15, 1994, the Respondents have argued through counsel that the Court should deny enforcement of the above-mentioned modified subpoena requests because they seek material relating solely to the Respondents' financial condition during the stated time period. As such, the Respondents contend, they are designed solely for the purpose of determining the Respondents' wealth and cannot be enforced because the RTC has failed to demonstrate specific and articulable facts giving rise to a suspicion that the Respondents were involved in wrongdoing. The RTC responds that because this material is reasonably relevant to the issue of liability and to the issue of whether the RTC should avoid transfers of any of the Respondents' assets or attach any assets, the contested modified subpoena requests should be enforced, without the need for any showing of an articulable suspicion of liability.

 BACKGROUND

 The RTC is investigating possible claims against various persons and entities relating to Home Savings, a failed savings association for which RTC was appointed receiver. Respondent Burke was a director of Home Savings from before 1983 to June 29, 1988. Respondent Gillam was a director from before 1983 to June 29, 1988, and was also Chairman of the Board and Chief Executive Officer of the association from October 1, 1985 to June 29, 1988. Respondent Reed was a director of Home Savings from before 1983 to June 29, 1988. The RTC is conducting the investigation to determine, inter alia, whether to pursue possible claims against Respondents Burke, Gillam, and Reed based on negligence, gross negligence, breach of fiduciary duty, or other misconduct relating to Home Savings, and whether to take other actions within the RTC's statutory powers.

 The RTC therefore issued subpoenas to the Respondents pursuant to its authority under 12 U.S.C. ยงยง 1821(d)(2)(I) and 1818(n) and pursuant to an order of investigation that states, in pertinent part, that the RTC is investigating to determine whether:

 
(1) former officers, directors, attorneys, accountants, and others who provided services to, or otherwise dealt with, Home Savings, its successors or affiliates may be liable as a result of any actions, or failures to act, in connection with or which may have affected Home Savings its successors or affiliates; (2) the RTC should seek to avoid a transfer of any interests or an incurrence of any obligations; (3) the RTC should seek an attachment of assets; and (4) pursuit of such litigation ...

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