It isn't every day that a former Maryland savings and loan executive who is an inmate at Allenwood gets another day in court and wins.
But that's what happened yesterday when an Alexandria jury awarded Julian M. Seidel, former president of the failed First Maryland Savings & Loan, nearly $1 million in a breach of contract case.
Seidel last year began serving a 12-year prison sentence at Allenwood Federal Prison Camp in Pennsylvania for conspiring to defraud former First Maryland depositors of millions of dollars that prosecutors said helped trigger Maryland's savings and loan crisis.
But the former thrift official traded the minimum security facility at Allenwood for the Alexandria jail this week so he could try to convince jurors in Alexandria federal court that a former partner owed him big money.
The case involved the bankruptcy of a venture capital company, Jenson Financial Corp., formed by Seidel after he was fired as president of First Maryland soon after the state took over the thrift in late 1985. Jenson filed for Chapter 7 bankruptcy, a liquidation, in January 1988, saying it owed various creditors about $296,000 that it could not pay.
But Jenson had claims against several parties and the bankruptcy court approved the bankruptcy trustee's motion that an attempt be made to collect those claims, said Trustee Richard G. Hall.
Yesterday's verdict was against Clinton Joint Venture, a partner with Jenson, and thus Seidel, in the development of a 17-acre tract of land near Andrews Air Force Base. After a dispute between the two entities, Clinton terminated the partnership and later sold the land for $1.4 million more than the mortgage on the property, according to attorneys for both sides.
The bankruptcy trustee filed suit against Clinton for breach of contract and breach of fiduciary duty, saying Jenson and its creditors were owed half of that amount. The jury agreed, awarding Jenson $700,000 for breach of contract and $210,000 in punitive damages; Seidel left the courtroom a victor.
"The jury listened to him and believed him," said John E. Harrison, an attorney appointed by the Alexandria bankruptcy trustee to take the case. "Our case was loan documents and Julian Seidel."
U.S. District Judge James C. Cacheris still must rule on the verdict.
"I think it's a fair, just verdict," said Harrison. "I think the judge will sustain it."
Mark P. Friedlander Jr., the attorney for Clinton, said he was "surprised and disappointed" in the verdict considering that it was "based on the testimony of a convicted felon."
However, if the judge upholds the award, there will be several happy parties. Foremost among them will be the creditors of Seidel's Jenson Financial Corp.
In what would be a most unusual bankruptcy case, the creditors probably would be paid in full.
The firm's largest creditors are United Financial Banking in Vienna, owed about $156,000, and the Business Bank, owed $34,000. The Business Bank is a subsidiary of United Financial, which provided financing for the land deal.
"My job starts now," said Hall, the bankruptcy trustee. "You can imagine the fight that's going to develop over this million dollars."
In addition, Seidel's family stands to profit from the judgment. His wife and family own all of the Jenson firm. While Seidel will be unavailable to go back into business for some years, his family may take the money and revive Jenson, attorneys said.