A Baltimore judge ordered today that Allan H. Pearlstein, one of the former owners of Old Court Savings & Loan Association, provide the state with detailed information about his assets and his expenditures or face stricter spending limits.
Pearlstein and his wife Rosemary have been under a court order since August limiting their spending to ordinary personal and business expenses.
Baltimore City Circuit Court Judge Joseph H.H. Kaplan ordered Pearlstein today to answer questions about his financial affairs within 10 days. If he does not, Kaplan said, he will issue an order limiting the Pearlsteins' total spending to $1,000 a week.
The Pearlsteins are codefendants with former Old Court president Jeffrey Levitt and his wife Karol in the state's $200 million civil suit against former Old Court officials. The state hopes to recover funds that can be returned to depositors, whose accounts have been frozen since a run at Old Court triggered Maryland's thrift crisis last May.
Shale Stiller, an attorney for the state agency overseeing Old Court, said the state has no way of knowing whether the Pearlsteins are "squandering their assets," and he argued for imposition of the $1,000 limit today. He said the Pearlsteins' spending in recent months has included expenditures for a large party at a local country club.
An attorney for the Pearlsteins argued that the money was spent on a long-planned "Sweet 16" party for their daughter.
Like the Levitts, the Pearlsteins have refused to answer questions about their finances posed by the Maryland Deposit Insurance Fund, Old Court's receiver. Attorneys for both couples have argued that their rights against self-incrimination allow them to withhold the information because it could be used by the state in its criminal investigation of Old Court.
Kaplan said today that the financial information the Pearlsteins are to turn over will be placed under court seal and be available only to MDIF officials. He also ordered Allan Pearlstein to pay $928,000 within 10 days to buy out Old Court's interest in a commercial venture.
In November, Pearlstein and Levitt made an agreement with MDIF to pay the sum by Jan. 1, but they have so far failed to do so.