Bank hires law firm for probe  

The South Bend Tribune South Bend, Indiana Thu, Feb 3, 1983 By MATT GALBRAITH Tribune Plymouth Bureau

CULVER Special counsel has been retained by officials of the State Exchange Bank to help evaluate "the banks relationship with the State Exchange Finance Co," according to a news release.

Bank President Allen H. Cummins disclosed in the prepared statement on Wednesday that the banks board of directors has engaged the law firm of Krieg, DeVault, Alexander amp; Capehart of Indianapolis to assist in the inquiry.

News of the inquiry was included, in a statement announcing that Cummins had been elected chairman of the board, and that the directors had resigned from their positions on the board of the finance company.

Until now, the directors had served in dual roles for the bank and the finance company.

"During the past several months, and particularly following the filing of the Chapter 11 bankruptcy proceedings by the finance company, there have been numerous rumors of improprieties by the bank and others, said Cummins.

"Our board of directors feels that it is important that an independent inquiry into these matters be initiated by the bank. Cummins succeeds Frederic E. Adams as chairman. Adams took his own life Jaa 10 apparently after becoming despondent over the finance company initiating Chapter 11 proceedings on Dec. 30.

Cummins, former president of the Farmers State Bank in LaPaz, was elected executive vice president of the State Exchange Bank in August and later was elected to the banks presidency. He now serves in the role formerly assumed by Adams.

Meanwhile, a group of creditors headed by Joseph. Currens, representing Thompson-Smith Co, Hamlet, is scheduled to meet Saturday to begin mapping out plans for the company's reorganization. A plan must be filed in federal bankruptcy court by April 30.

Also, a hearing is scheduled m South Bend on Tuesday.

Cummins said results from the bank-ordered inquiry "will be disclosed to our shareholders and the community as appropriate i n the future". Explaining the reason why the directors resigned from their positions with the finance company, -Cummins said: "All of the directors believe it is important for them to devote their full energies to management of the State Exchange Bank. "In addition, our resignations are in keeping with the desires of state and federal banking authorities".