Friday, August 23, 2002

Homeowners to receive relief

Bank sale to pay off liens

By Patrick Crowley,
The Cincinnati Enquirer

        BURLINGTON — The 211 homeowners caught up in the Erpenbeck Co. scandal and left without clear title to their property should have construction liens on their homes released before the end of the year, according to documents filed Thursday in Boone County Circuit Court.

Click here for all Enquirer reports on Erpenbeck Co.
        Peoples Bank of Northern Kentucky will deposit nearly $17 million into an escrow account once the sale of the bank's branches, deposits and select loans to Boone County-based Bank of Kentucky is completed. The sale is now expected within the next few weeks, said Beverly Storm, a lawyer for Peoples Bank.

        The money will be used to pay off liens on the 211 homes. The nearly $17 million represents the amount of money that employees at the Erpenbeck Co. are accused of diverting into company accounts at Crestview Hills-based Peoples Bank.

        The diverted checks were cut at home closings and were supposed to cover construction loans.

        Because the loans weren't satisfied, liens were placed on the properties.

        “We're glad that Peoples Bank still appears motivated to protect and work with the class counsel to protect the interests of these homeowners,” said Cincinnati lawyer Terrence Goodman, one of the lawyers who filed a class-action lawsuit representing the homeowners.

        Boone Circuit Judge Jay Bamberger and federal regulators must approve the deal. Ms. Storm said Peoples Bank is confident the construction loans will be released 90 days after the sale.

        But Mr. Goodman worries that not enough cash will be set aside to satisfy all liens. He plans to seek an audit.


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