May It Please the Court!
From Auto Accidents to Agent Orange:
Building a Storefront Law Practice into
America's Largest Suburban Law Firm
Leonard Rivkin
with Jeffrey Silberfeld
Carolina Academic Press
Durham, North Carolina
|
Ch. 8 - Franklin National Bank
On October 9, 1974,1 began my workday, as usual, sitting at my desk reading the New York
Times. That morning, a front page headline reported that the Comptroller of the Currency had
declared Franklin National Bank insolvent. In those days, bank failures were not uncommon; Franklin
was the 55111 federally insured bank to collapse between 1965 and 1974. Nor was Franklin’s failure
totally unexpected; rumors about the bank’s deteriorating condition had been circulating for years.
Nevertheless, Franklin’s collapse made headlines not only in New York but around the country
because it was the largest bank failure in American History. On the date of its insolvency, Franklin
ranked 2Oth among the nation’s banks, with assets totaling $4.5 billion. Although best known as the
preeminent bank on Long Island, where it had maintained more than 50 branches in Nassau and
Suffolk counties, it had recently opened 25 branches in New York City and an important overseas
branch in London.
The article mentioned some of the reasons for Franklin’s demise: bad management, poor
earnings, huge losses in foreign currency trading, a missed dividend payment, a run on deposits, and
a debt of $1.77 billion which Franldin owed to the Federal Reserve. The article also reported that
European American Bank had reached an agreement with the Federal Deposit Insurance Corporation
to take over the failed bank. Remarkably, the morning after Franklin’s insolvency all of its branches
reopened as branches of European American, there were no interruptions of service, and none of
Franklin’s 600,000 depositors suffered any loss.
Later that day, I met with Stu Sherman to discuss firm business. "Too bad about the Lollipop
Bank," he said.
"What are you talking about?" I asked.
"Franklin. They used to call it the Lollipop Bank. Whenever a kid opened an account there,
they gave him a lollipop."
That evening, returning home from work, I drove past one of the bank’s branches. "Franklin
National Bank," proclaimed the lettering on the door. "European American Bank," announced a
hand painted sign in the window.
Then I arrived home, ate dinner, and didn't give Franklin National Bank another thought.
Little did I realize that the time would soon come when I would think of little else.
* * *
to chapter 9....
TABLE OF CONTENTS
HOME
|
Updated:
|
|
|
