PFF Bancorp creditors seek probe of auditor KPMG

NEW YORK, June 8 (BestGrowthStock) – Creditors of failed savings
and loan PFF Bancorp Inc (PFFBQ.PK: ) are seeking permission to
launch a probe into whether the company’s auditors knew it was
taking on too much risk.

In court documents filed in U.S. Bankruptcy Court in
Delaware late Monday, the company’s official committee of
unsecured creditors, said they want documents from auditor KPMG
[KPMG.UL] to see whether the auditor knew the bank was
undercapitalized prior to its collapse in 2008.

U.S. regulators seized California-based PFF Bank in
November 2008 and sold its assets to U.S. Bancorp (USB.N: ).

“Information in KPMG’s possession may support potential
claims against third parties and against KPMG itself, if, for
example, it becomes apparent that KPMG knew or should have
known at an early date of any overly-aggressive or
inadequately-controlled loan practices of the (company),” the
creditors wrote in the request.

The creditors said they also wanted to look at whether KPMG
knew that PFF had failed to maintain adequate loan reserves,
given the risk profile of its lending portfolio.

A KPMG spokesman was not immediately available on Tuesday.

Creditors of bankrupt companies often seek information from
third party advisers and auditors after a company’s collapse in
hopes of eventually bringing a complaint and recovering more
funds.

A hearing on the creditors’ request is set for June 23.

The case is In re: PFF Bancorp Inc, U.S. Bankruptcy Court,
District of Delaware, No. 08-13127.

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(Reporting by Emily Chasan, editing by Gerald E. McCormick)

PFF Bancorp creditors seek probe of auditor KPMG