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On November 19, 1992, by letter agreement (the letter
agreement), WFNNB appointed Merrill, Lynch, Pierce, Fenner &
Smith, Inc. (Merrill Lynch), as its agent for its customers who
desired to purchase CDs. The letter agreement provided that the
CDs would be sold in denominations of $100,000 or integral
multiples thereof.
During December 1992 and January 1993, WFNNB, acting through
its agent, Merrill Lynch, sold 17 CDs, receiving $26.3 million.
Those 17 CDs comprised 263 “transferable individual time deposit
accounts” of $100,000 each. Each of those accounts was insured
by the Federal Deposit Insurance Corp.
MFE (Netherlands Antilles) N.V. (MFE N.V.), is a Netherlands
Antilles corporation. On January 28, 1993, MFE N.V. purchased
eight CDs from WFNNB in the total amount of $174.9 million (the
MFE N.V. CDs). Each MFE N.V. CD was for a term of 1 year, showed
an annual interest rate of 3.1 percent (annual yield of
3.14 percent), and provided that it was a “non-negotiable and
non-transferable time deposit”. Each also provided: “This Time
Deposit shall renew automatically for a like term unless and
until notice of withdrawal is presented at the Bank within * * *
seven calendar days after the maturity date”.
Reduction of Indebtedness to Limited Service
On January 28, 1993, WFNNB transferred the $174.9 million
received from MFE N.V. on the sale of the CDs to Limited Service
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Last modified: May 25, 2011