May 28, 1999

A bankruptcy hearing to determine the status of Catherine Duffy Petit's Chapter 7 case has been scheduled for Wednesday, June 2 at 2:00 p.m. at the U.S. Bankruptcy Court in Portland, Maine. The court is located at 537 Congress Street.

The hearing is expected to be attended by a number of creditors, many of whom have expressed a desire to see that Petit's 14-year effort to go to trial against Key Bank be allowed to go forth.

Petit was placed into involuntary bankruptcy in 1993. The assets of her estate - primarily the Key Bank case - are in the hands of the trustee appointed by the court. According to Petit, John Connor, the Portland attorney for the petitioning creditor of the involuntary action, has acknowledged in the past that he consulted with Key Bank's attorneys about taking the action.

Key Bank has reportedly made an offer of $1.7 million to the trustee to settle Petit's case. Key Bank's former co-defendants, the Portland law firm of Bernstein, Shur, Sawyer & Nelson, settled for $3.9 million in 1990. The potential jury award for the current case has been estimated to be as much as $66 million or more, with an additional 94% interest added on.

Petit alleges that Key Bank's predecessors, Depositors Trust of Maine, conspired with the law firm to force her to take on partners for ownership of the Old Orchard Beach Pier. The bank's president and a law firm partner were allegedly among them. She refused and was eventually placed into foreclosure.

In a letter she wrote to U.S. District Court Chief Judge D. Brock Hornby earlier this month, Petit alleged that Assistant U.S. Attorney Donald Clark - the lead prosecutor in her recent 78-count criminal conviction - intervened in the bankruptcy case by telling an attorney that his creditor should accept the Key Bank settlement offer.

It is unclear whether Petit will be allowed to attend the hearing. She is currently being held at the Cumberland County Jail and is scheduled to be sentenced June 8 at 8:30 a.m. in U.S. District Court. Co-defendant Paul Richard, also being held at the CCJ, is scheduled to be sentenced June 9 at 9:30 a.m. Donald Shields is scheduled to be sentenced June 17 at 9:00 a.m. Thomas Blackburn's sentencing has been postponed until after Stephen Hall's trial.