Tom Martino, First Citizens Bank & Trust in first day of trial

[Rob]

From the Denver Post:

Tom Martino, First Citizens Bank & Trust in first day of trial



Real estate developer and radio personality Tom Martino squared off against First Citizens Bank & Trust Co. in court on Tuesday for a two-day trial to settle Martino's dischargeability lawsuit against his lender.

Before opening comments could even be made, Judge Michael Romero asked both legal teams to pardon his ignorance, but please tell him, "Why are we here today?"

It took nearly the entire first day for the plaintiff's and defendant's directions to crystallize in the case, which has been separated from Martino's larger bankruptcy case.

Martino filed the lawsuit claiming that his debt owed to First Citizens Bank should be discharged. First Citizens disagrees.

The case hinges on whether or not Martino falsified financial statements and attempted to hide his assets under his wife's name.

The bank inherited the debt from its predecessor, Colorado Capital Bank, which gave Martino two loans — a unsecured line of credit and a personal guaranty of a loan for a failed real estate project, which together totaled $3.7 million.

Martino's testimony took up the majority of the day. The bank's lawyer, Brian Matise, meticulously reviewed 48 exhibits, asking Martino whether he remembered signing various financial statements and credit applications.

Martino agreed that he had signed several documents, but refused to acknowledge that it was his signature on several records from 2006 and 2007.

Martino's legal team, Stephen Berken and Aaron Israels, argued that his extensive personal relationships with the bank's leadership at Colorado Capital was so long-standing and informal that Martino didn't believe he needed to file documentation unless specifically asked for it.

According to Martino, the bank approached him and asked him to increase the amount on his second loan by $1 million in 2009. "The only thing it did was cleaned up their books for the (Federal Deposit Insurance Corp.)," he said. "I don't think they did something wise, but I wasn't going to argue with them because I could use the additional money."

Martino had a land-use loan with the bank that, as the recession took a toll on real estate, began to look unstable for banks.

The trial's momentum began to shift at the end of the day when the defense called its second witness, Kenneth Whitelam.

Whitelam, a former senior vice president of Colorado Capital, refuted Martino's assertion that they pressured him to borrow more money. He said the loan was mutually beneficial for both parties.

Court adjourned for the day before Israels or Berken could cross-examine Whitelam.

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