Earlier this week, we learned that Alexi Giannoulias and his family can’t come up with more than a few hundred thousands dollars to keep the feds from seizing their bank, which needs $75 million in new capital, and from which the Giannouliases extracted almost $70 million over the last few years. Don’t worry about those destitute multi-millionaires for very long, though. Thankfully, they are poised to get $10 million from the same federal government that is about to seize their family business:
The family of Democratic U.S. Senate nominee Alexi Giannoulias stands to collect more than $10 million in federal tax refunds even if its Broadway Bank fails, which Mr. Giannoulias said this week is likely.
A $75-million loss at the struggling lender last year generated tax benefits potentially worth between $12 million and $15 million to Mr. Giannoulias, his two brothers and his mother. As the sole owners of a subchapter S corporation that controls $1.2-billion-asset Broadway, they pay the taxes on the bank’s income and reap tax deductions on its losses.
The possibility of family members pocketing millions in tax refunds as Broadway slides toward insolvency and federal receivership is likely to fuel more controversy for Mr. Giannoulias, who is already under fire for his role in the bank’s downfall. In an interview this week, he took some responsibility for a disastrous expansion of real estate lending when he was senior lender at Broadway in the mid-2000s, before winning election as Illinois treasurer in 2006
Just how sweet is this deal? Chicago Business puts it in a nutshell: READ MORE...
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