The former longtime attorney for First NBC Bank has agreed to repay roughly $30 million in defaulted loans that he took from the failed New Orleans bank, court records show.
In reaching the deal, which was approved last month by a state judge in St. Tammany Parish, Gregory St. Angelo was able to cut his debt by nearly half of what a firm that bought his overdue loans at an auction claimed he owed.
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“They turned out to be really nice fellows,” St. Angelo said recently. “I guess it’s like anything else. The more you get to know somebody and talk to them, the easier it is to work with them.”
St. Angelo’s debt to the bank where he worked was among nearly $1 billion in loans that were auctioned off by the Federal Deposit Insurance Corp., the U.S. banking regulator, after First NBC collapsed in April 2017. Some of the loans were good; some were shaky; some were in default or close to it.
Summit Investment Management, a Denver-based private equity firm that specializes in distressed debt, was the biggest buyer in the First NBC auction. It paid about $122.5 million — roughly 25 cents on the dollar — for two pools of 254 loans that First NBC had valued at $488.5 million. That haul included St. Angelo's debt.
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Working to recoup their investment, attorneys for Summit have filed a raft of civil lawsuits against St. Angelo and others, court records show.
Still, despite the resolution of his debt with Summit, St. Angelo’s legal issues aren’t over. He owns several properties in St. Tammany and New Orleans that are in various stages of being seized and sold, including his home in Mandeville’s Sanctuary subdivision.
In addition to the civil litigation, St. Angelo's role at First NBC is being explored by a federal grand jury that's investigating potential criminal charges related to the bank's collapse, the costliest bank failure in the U.S. since the height of the 2008-10 financial crisis.
The investigation apparently is looking into the possibility that the bank's failure can't be chalked up only to some bad loans. The alleged recklessness shown by First NBC’s founder and CEO, Ashton Ryan Jr., in approving loans has always seemed to be at the forefront of the probe.
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In a 2014 deposition, Ryan said St. Angelo’s main job at First NBC was to chase after borrowers who fell behind. "He's an expert in that whole area,” Ryan said.
St. Angelo demurred recently when asked whether he’s heard from investigators or where he believed the inquiry stands, and said he wasn't sure what to make of it. “It’s not a case of ‘no comment,’ ” he said. “It’s a case of ‘I don’t know.’ ”
By the time the bank went under, St. Angelo’s debt had climbed to more than $49 million, according to a petition that Summit filed in March, although he was not the lone guarantor on some of it. Summit alleged that his collateral was worth “a mere fraction” of what he owed.
That lawsuit, filed in 22nd Judicial District Court in St. Tammany Parish, alleged that St. Angelo was insolvent and borrowed beyond his means to support a lavish lifestyle for his family.
St. Angelo stopped making loan payments after the bank failed, the suit alleged. And even before that, he had often relied on the bank to issue him new loans as his older debt came due — a frequent practice at First NBC that industry regulators have strongly criticized.
His high-ticket items included paying college tuition for two of his children, buying a 2006 Porsche 911 and hosting a lavish wedding and reception for his son, Bradley St. Angelo, that boasted 24,000 cut flowers, imported from Holland and hung individually from a frame in a process that took nine hours.
“The foregoing acts increased his insolvency, or in the alternative, one or more of the foregoing acts caused Mr. St. Angelo’s insolvency, and the subsequent acts increased his insolvency,” Summit alleged in its lawsuit.
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Records show at least part of that money went toward buying property, some of which has become the target of creditors.
Summit’s lawsuit dovetails with other allegations about First NBC’s unusual appetite for risk and its penchant for issuing or renewing large loans to clients who were already knee-deep in debt — and, in some cases, had close ties to the bank or its leadership.
The consent judgment concerning St. Angelo's debt was approved June 27 by 22nd Judicial District Judge Reginald Badeaux III. As part of the deal, Summit maintains rights to certain collateral property that St. Angelo tied to the loans.
St. Angelo described the agreement as “a global resolution” of Summit’s claims. He declined to offer specifics, citing a confidentiality agreement.
“Everything is amicably resolved,” he said.
David Waguespack, a New Orleans attorney for Summit, declined comment.
With a judgment in place, St. Angelo will have to come up with the approximately $30 million he now owes, which he acknowledged could mean parting with some of the property that’s he’s amassed in the metro area in recent years.
“If something makes sense, I guess I would look at it. I don’t necessarily have any deep sense of attachment to a lot of it,” he said of a potential sale.
His holdings include a stake in Annadele's Plantation, a Covington bed-and-breakfast, which was in the process of being seized and sold until an auction was canceled recently at the last minute. It was appraised at $1.9 million.
“I’ve had it for 15 years, and I mean, we don’t make a ton of money,” he said, “but it’s self-sufficient.”
He also owns the former Our Lady of Lourdes Church on Napoleon Avenue in New Orleans, which he bought from the Archdiocese of New Orleans for $1.3 million in 2016.
And in the French Quarter, he owns 618 Conti St., which he bought for $2.1 million in 2015, including $600,000 in cash. But in a separate legal dispute, the building’s previous owner contends that St. Angelo fell behind on payments for the four-story building, and the former owner has taken steps to seize and sell it.
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Meanwhile, in St. Tammany, several of his properties, including three vacant lots as well as his home in Mandeville’s leafy Sanctuary subdivision, are tentatively scheduled to be auctioned off Wednesday.
Despite his uncertain situation, St. Angelo said he has no animosity toward Summit, and he even sounded somewhat sympathetic to the firm's position.
“At the end of the day, it’s like everything else, it turns out not to be that, I guess, that much of a big deal,” he said of their claims against him. “They — like everybody else — are looking to make a return on their investment.”