Wilshire, Ex-Execs Settle Lawsuits

As part of the settlement, the entirety of which is not being disclosed, Wilshire Financial agreed that the termination of Wiederhorn and Mendelsohn was “without cause.” The company had been arguing otherwise in an attempt to withhold severance payments. Neither side is saying whether those payments were made as part of the settlement.

Wilshire Financial terminated Wiederhorn and Mendelsohn on September 3 of last year. The two then sued Wilshire and its outside directors for $20 million for wrongful termination.

Wilshire Financial also announced Monday the end to all disputes and pending litigation with Wilshire Real Estate Investment Inc., which Wiederhorn and Mendelsohn still direct. The litigation related to the termination of various agreements and other business relationships between the companies.

Both companies are recovering from the ordeal, which began in the fall of 1998 when Wilshire Financial, a highly-leveraged packager of troubled loans then headed by Weiderhorn and Mendelsohn, collapsed as its market for such securities dried up.

After big losses for both companies in 1999, Wilshire Financial’s share price closed Monday at $1.13, off 13.6 % for the year and a fraction of the $30 a share it once demanded. Wilshire Real Estate shares closed Monday at $2.53 a share, down 19.1% for the year, and well off the $17 it was trading at in 1998.