Letter from Andrew Hove/Acting Chairman of the FDIC

Washington, DC 20429


June 30, 1997

John and Rhetta Sweeney
24 Meyer Lane
Hamilton, Massachusetts 01982

Dear Mr. And Mrs. Sweeney:

We regret that you continue to reject our attempts to amicably resolve this matter, including recent mediation in the format initiated by your then-counsel.

The litigation has been concluded in favor of the receivership estate of ComFed Savings Bank. We have allowed you to exhaust all legal avenues of appeal, including to the U.S. Supreme Court while you have continued to use property we have legally owned since November 1994. In March 1990, a Massachusetts jury of your peers ruled that ComFed did not defraud you and that you should repay your loan. Only one court official, a state judge who no longer had jurisdiction and who differed from the jury despite hearing the same evidence has ever ruled in your favor. The state judge’s decision which attempted to offset the jury’s verdict was reported to be the first of its kind where a lender was deemed liable for an oral promise to lend additional monies in a commercial context, and has since not been supported by any higher court.

Although we have had the legal right to evict you since November 1994, we have attempted to work with you to amicably resolve this matter. We have been more than generous and have offered to return you to a more favorable position than you were in before ComFed ever loaned you money. When ComFed made its loan in August 1987, you owed more than $1 million and were in a foreclosure proceeding with another lender. Although you have not made mortgage, rent or property tax payments in approximately 10 years - all at taxpayer expense-we offered to sell you both homes for $637,000, approximately one-half of their market value. We also offered to sell either of the homes to you free and clear of all liens for $1. You have consistently rejected all attempts to settle and we have therefore withdrawn our settlement offers.

John and Rhetta Sweeney
June 30, 1997
Page 2

Our position has always been to settle on reasonable terms, taking both sides into consideration, but we cannot continue to delay or justify further costs to taxpayers. While we remain willing to entertain a settlement offer from you, you must first peacefully resolve the outstanding eviction order with the U. S. Marshals Service and leave our property. Once you have vacated our property, we will consider a reasonable settlement proposal from you, as well as purchase offers from other interested parties.

The current situation is unfortunate, but you are responsible, and we cannot continue to let this matter go unresolved.


Andrew C. Hove, Jr.
Acting Chairman