The Maryland government agency controlling Old Court Savings & Loan has asked a Baltimore judge to limit to $1,000 per week personal spending of Allan H. Pearlstein, one of the thrift association's former owners.
In a motion filed Friday, lawyers for the Maryland Deposit Insurance Fund asked Baltimore Circuit Court Judge Joseph H.H. Kaplan to restrict Pearlstein's spending, saying the former savings and loan owner had not assisted the state in its effort to dispose of Old Court's many real estate and commercial assets.
MDIF's request to Kaplan is akin to one it sought and won last fall against Jeffrey A. Levitt, the former president and another part owner of Old Court. Levitt has been sentenced to 18 months in jail on contempt of court charges for violating Kaplan's order and may start serving that sentence this week.
MDIF Director Melville S. Brown said last night that "Pearlstein has not been very cooperative in our effort to get a handle on Old Court's assets. It's the same game that Levitt was playing."
Kaplan said yesterday the MDIF request cites Pearlstein's refusal to answer questions about his personal financial situation because of the Fifth Amendment protection against self-incrimination. The judge added that MDIF attorneys cited Pearlstein's failure last month to put up nearly $1 million to buy out Old Court's interest in a commercial venture.
Kaplan said he will consider the MDIF request within two weeks.
MDIF has charged that Pearlstein and Levitt had made an agreement with the state to pay the sum but defaulted on the deal, Kaplan said.
Old Court, of Baltimore, has been at the center of Maryland's thrift crisis since May, when reports of Levitt's forced resignation triggered a run by depositors.
More than 50,000 depositors have had virtually no access to their money, but Gov. Harry Hughes recently announced that state government will spend $155 million this year to begin paying them back.
In August, MDIF filed a $200 million civil suit against Old Court officials, charging them with "the largest financial fraud in the history of the state of Maryland."