Ex-BoS receiver wants bank to pay for his legal expenses

Former Bank of Saipan receiver Randall Fennell yesterday asked the Superior Court for indemnification in connection with the lawsuit filed against him by the bank.

If the request is granted, the bank will shoulder the cost of Fennell’s defense against the civil lawsuit being pursued by the bank against him.

Fennell filed the indemnification claim following the request of incumbent bank receiver Antonio Muna for exoneration and termination of the receivership. Fennell asked that the receivership court retain jurisdiction over his indemnification claim, should the receivership be terminated.

Fennell’s attorney, Rexford Kosack, said the bank’s lawsuit stemmed from his client’s actions as the institution’s temporary receiver. He said the lawsuit has now required Fennell to hire a legal counsel to defend him.

“As a receiver, he is entitled to indemnification of his attorney fees and costs from such litigation, depending upon the outcome of the matter. Mr. Fennell is filing this claim so that it will not be waived and asks the court to retain jurisdiction over the matter so it may be resolved at the appropriate time,” Kosack said in a document submitted to court.

Kosack also said that Muna had earlier made known his position that the bank should pay Fennell fees and costs due to “strong public policy” and other grounds. Sometime in November last year, Muna expressed reluctance about the bank’s litigation against Fennell, citing potential costs that the bank might incur in the lawsuit.

But he said Muna’s camp later retracted, particularly on Fennell’s indemnification claim, with the bank’s attorney’s telling Fennell that it would not indemnify the former receiver.

Kosack noted that Muna’s camp had entered into an agreement with the bank regarding the receiver’s exoneration and the termination of receivership.

He said the agreement required Muna’s camp to “not in any manner directly or indirectly cooperate with or assist any person…asserting a…defense against the bank as a party….”

The bank’s board, through the law firm of David Mair, filed a civil complaint against Fennell and his attorneys in late September, accusing the defendants of breaching their fiduciary duties to the bank.

The complaint seeks monetary damages against Fennell and the defendant attorneys, Richard Pierce and his former law firm, White, Pierce, Mailman & Nutting; and David Axelrod and his law firm Schwabe, Williamson & Wyatt.

The CNMI government, however, wants an end of the litigation, which it believes would just prove costly to the bank. But the Marianas Public Lands Authority, the bank’s biggest single depositor, joined the suit and filed with the Superior Court a complaint against Fennell and his attorneys.