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Amir Sues, Says He Was Misled by FSLIC on Beverly Hills S&L

April 24, 1987|AL DELUGACH | Times Staff Writer

Investor Paul Amir accused federal savings and loan regulators Thursday of fraudulently concealing the "dissipated" financial condition of Beverly Hills Savings & Loan when they "induced" him to take control of the firm in April, 1984.

In a lawsuit filed in U.S. District Court here against the Federal Savings and Loan Insurance Corp., Amir said FSLIC knew that Beverly Hills S&L was "on the verge of financial collapse and ruin" at the time and demanded more than $100 million in damages.

The agency and its overseer, the Federal Home Loan Bank Board, did so to get Amir to increase his investment--already worth several million dollars--and to replace the predecessor operators "with competent and honest management," the suit said.

A year after Amir took over, regulators seized the S&L and put it in receivership.

The suit asks for $14 million in compensatory damages and at least $90 million in punitive damages.

The suit is a counterclaim to an action that FSLIC itself filed last October against more than a dozen former directors and officers of the S&L, including Amir and the head of the prior management, Dennis M. Fitzpatrick.

The agency's suit asks more than $300 million damages as a result of alleged mismanagement and misconduct.

Amir's suit asserted that, as early as October, 1982, the bank board had given the Fitzpatrick management an adverse rating as "dangerous and unsatisfactory." But, the suit charged, the regulators concealed this and other facts, including that the S&L had operated at a loss for each of the 17 months before April 30, 1982, as well as operating losses for 1981, 1982 and 1983.

In secret internal memoranda in April, 1982, February, 1983, and March, 1983, the board "rendered a devastating indictment of the way the Fitzpatrick group managed the affairs of the (S&L)," the suit said.

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