Bank Returns City's Investment

Tuesday, November 11th 2008, 8:19 am
By: News On 6

By Dave Jordan, NEWS 9

GUTHRIE, OK -- While cash-strapped automakers are looking for bailout money, an Oklahoma town is just hoping to get its money back.

The city of Guthrie was burned when a bank collapsed.

Guthrie made investments in Lehman Brothers through Bank of Oklahoma, and Lehman's bankruptcy caused the city to lose thousands of dollars in interest payments.

The city is now trying to getting that money back.

The city of Guthrie was counting on those interest payments worth about $400,000 a year to pay for this new city hall building and water line improvements.

"We had to have the $5.4 million investment completely collateralized with government securities and they had been for 9 and a half years," Attorney Randel Shadid said.

Earlier this year, Bank of Oklahoma sold off a portion of the investment and Lehman Brothers said it would send replacement security. It never happened and the city lost two months of interest payments.

City leaders now want their initial $5.4 million returned and on Monday, Bank of Oklahoma agreed to do just that.

"We're very pleased BOK has treated Guthrie well in this situation," Shadid said.

The money will remain in the city account at the bank until the city decides where to invest it next.

Shadid said it's unlikely it will get the same rate of return which means those interest payments will be about $200,000.