Jeb Bladine: Stover case brings a rush of memories
Once, long ago, I secured a loan with a phone call followed by a quick bank visit to sign a few sheets of paper. Today, the same process can take weeks, if not months, with more stringent requirements related to collateral, cash flow and security pledges.
Banking has changed. Once-simple transactions now require piles of paperwork, mounds of financial reports and multi-levels of personal guarantees.
The primary reason is a dramatic expansion of banking regulations. New rules respond to such phenomena as the savings & loan crisis of the 1980s and 1990s, and the subprime housing catastrophe that started in 2007 and still plagues people today.
Those new rules can be a significant inconvenience, but they also protect banks against high-risk borrowers who might otherwise smooth-talk their way into questionable loans doomed to end in default. A recent News-Register story reminded us of one of those high-risk borrowers, former McMinnville resident Ron Stover.
As reported, Stover, 62, of Tualatin, and his son Jeffrey, 40, of Wilsonville, have been indicted on federal wire and bankruptcy fraud charges. Allegedly, the two men lived lavish lifestyles with money raised from investors for potentially profitable development projects. Both pleaded not guilty to the charges.
The elder Stover also is accused of lying in connection with a $9.5 million personal bankruptcy three years ago in Texas. Justice system officials said he faces another federal indictment in Nevada for theft, racketeering and securities fraud.
People with long memories still discuss Stover’s giant-sized local bankruptcy in 1988, one year after a spectacular 45-day failure of the ill-fated LoPiparo Foods luxury supermarket. Already a well-known financial wheeler-dealer, Stover filed an eye-popping $24-plus million personal bankruptcy, the equivalent of more than $50 million today.
The majority of Stover’s debt, about $13.5 million, was to banks. The largest creditor was U.S. National Bank at $7.2 million, including more than $2 million duplicated by United Grocers Inc. as a co-signer. A LoPiparo-related business, 15th Ave. Thriftway of Portland, listed $4.8 million in debts owed by Stover.
Banks are more cautious today. However, if the recent federal charges against Stover and son are true, there still are plenty of individuals who can be drawn into dubious financial schemes.
Next week, I’ll delve deeper into the story of that LoPiparo’s disaster three decades ago -- a story with an ironic twist involving my favorite local grocer from the 1950s.
Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.
Comments
Don Dix
As was shouted sometime during every episode of 'Cheers' .... Norm!