Appeals court panel weighs Wilmington Trust convictions

DOVER, Del. (AP) — Attorneys representing former executives for the only financial institution to be criminally charged in connection with the federal bank bailout program have asked a federal appeals court panel to overturn their convictions.

Defense attorneys argued Tuesday that prosecutors had failed to prove that the former Wilmington Trust executives deliberately lied to federal regulators about the extent of the bank’s past-due commercial real estate loans before Wilmington Trust imploded and was hastily sold in 2011.

The term “past due” was not clearly defined in reporting requirements for submitting documents to the Securities and Exchange Commission and the Federal Reserve, and prosecutors therefore failed to prove beyond a reasonable doubt that the defendants made false statements, defense attorneys contend.

“The term ‘past due’ can be reasonably interpreted not to encompass the loans at issue here, and available regulatory guidance did not unambiguously require the reporting of such loans,” said George Hicks Jr., an attorney for former Wilmington Trust chief credit officer William North.

Assistant U.S. Attorney Robert Kravetz noted that the trial judge found that the defendants’ interpretation of the term past due was not “logical,” and that there was no ambiguity in the reporting requirements.

“Rather, the instructions specifically tie past due status to the loan contract and to the payment, or lack thereof, of interest or principal,” Kravetz said, quoting from a ruling by U.S. District Judge Richard Andrews.

A three-judge panel of the Third Circuit court took the case under advisement after hearing arguments for more than two hours. The panel had initially allotted attorneys only 20 minutes for each side.

“We recognize this is...