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The Cedar Rapids Gazette , Thursday, January 30, 1986 EX-FARMERS AWARDED $3 MILLION
A U.S. District Court jury in Cedar Rapids on Wednesday returned a verdict against the First National Bank of Oelwein for slightly more than $3 million - $1.3 million more than the farmer plaintiffs had sought. The total judgment against the bank of $3.6 million, which includes interest, nearly equals the amount of money the bank has to protect against catastrophe. However, the president of the bank said Wednesday the judgment, if upheld on appeal, will not be paid from the bank's assets. In the suit, brothers Cal and Robert Knickerbocker alleged they were forced out of farming as a result of the failure of the bank in 1983 to pay rent on 4,200 acres they farmed. Their attorney argued for a verdict of $1.7 million, including $200,000 in punitive damages. The bank contended the loss of their farming operations was the result of failure to follow good business practices and expanding their operations too rapidly . Tom Riley, the Cedar Rapids attorney who represented the Knickerbockers , said the judgment would break the bank, because it is greater than the bank's net worth. But, he added, he would be willing to sit down with bank officials to work out arrangements for having the judgment paid off in installments. Bank President Randall Wright said Riley's comment about breaking the bank was simplistic and inaccurate. Wright said the bank's holding company, Oelwein Bancorporation, has substantial wealth, and the bank has access through it to any amount of funds necessary. He also said he expects the judgment will not stand. The verdict, he added, appears to be based on emotion rather than the facts. Wright said the bank has told its attorney to start the appeal process. ELLEN STOCKDALE of the office of the comptroller of the currency in Washington, D.C., said the bank has reported primary capital of $3.786 million, which includes equity and reserves, among other things. The figure represents a bank's protection against catastrophe, she said. Stockdale said her office expects to hear from the bank today about its plans for dealing with the judgment. The Oelwein bank has talked to a couple of examiners in the field, she added, and one of them told her that one of the bank stockholders has offered to add capital. She cautioned that one should never count on someone coming through with capital. Riley said he has seen information indicating the bank's primary capital is less than $3.6 million, although it was higher at the time the last report was made. Through 1983, Cal Knickerbocker, formerly of Stanley and now of Florida, and Robert Knickerbocker, formerly of Arlington and now of Arizona, operated farms that stretched from northern Buchanan County 70 miles north into Minnesota and then east into Wisconsin. They contended the bank tied up proceeds of their 1983 operations in spite of a Nov. 29, 1983, agreement to pay the landlords from that year's crop proceeds. The bank denied making such an agreement and contended that even if it had, insufficient funds were available to pay the rent. The bank also contended the Knickerbockers suffered no damages by going out of business, because evidence indicated they would continue to lose money as they had been. The jury returned verdicts to each brother of $620,000 for lease acceleration , $50,000 for emotional distress, $400,000 for loss of credit reputation and $50,000 in punitive damages. For lost profits, the jury returned a $375,000 verdict for Cal Knickerbocker and a $400,000 verdict for Robert Knickerbocker. Tom Riley Law Firm, P.L.C.
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