CHILTON'S BROTHER DEFAULTED ON $16 MILLION FROM FAILED BANKS

ST. LOUIS Businesses controlled by the brother of the former head of the failed First Exchange Banks, accounted for about 35 percent of the estimated $46 million cost of bailing out the failed banks by the FDIC, the agency that insures bank deposits.

Bill Chilton, a St. Louis businessman and brother of former First Exchange chief executive Donald Chilton, borrowed $16.7 million from First Exchange Banks as of Jan. 31, according to a court exhibit submitted by the banks in a federal lawsuit filed in Cape Girardeau.

Of the $16.7 million, Bill Chilton and his companies had defaulted on $16 million in loans, according to a summary of Chilton's obligations to Exchange Banks filed in the federal lawsuit.

First Exchange is accusing the Chilton brothers of conspiring to obtain loans fraudently from the banks, according to the documents.

All but $2 million of the $16.7 million total was borrowed from Jackson Exchange Bank, according to the lawsuit. Donald Chilton is former chairman of the Jackson Bank. The totals were disclosed in a news article that appeared in this week's St. Louis Business Journal.

Sour loans were largely responsible for the collapse of First Exchange Corporation, a Cape Girardeau-based holding company which included operations in Cape, Jackson, Fredericktown, Farmington and St. Louis.

The banks were seized May 7 by state banking regulators and sold to other financial institutions.

Bill Chilton is president and shareholder of Mid-America Management Corp., a company which once owned a motel in Sikeston which was foreclosed upon earlier this year. The Jackson Exchange Bank shared in a $3.6 million loan used to buy the hotel in 1986, according to court documents.

The Journal listed other businesses affiliated with Bill Chilton as Missouri Leather and Quality, Wespac, Inc.; Bill Chilton Voluntary Trust; Broadridge Corp; Markham Inns Inc.; and Chilton & Co. Also listed in the suit against Bill Clinton was a business partner, B. W. Birk, a former major shareholder of First Exchange and a bank company director, according to the Journal article.