The Federal Savings and Loan Insurance Corp. is seeking $8.7 million in damages from the founders of Santa Ana-based Perpetual Savings Bank, contending that the principals established the S&L with the sole intent of buying land in West Hollywood for themselves and selling it back to Perpetual at a profit.
The allegations are contained in a complaint filed this week in Los Angeles federal court. In March, the FSLIC declared Perpetual insolvent and reorganized it under a new federal charter under the control of FSLIC officials.
None of the principals could be reached for comment Thursday.
The suit alleges that First Business Holdings, Perpetual's owner, founded the S&L in 1983 mainly as a means to raise money to purchase and develop the $80-million piece of property known as the "Melrose-Doheny Triangle."
More than 20% of Perpetual's assets were earmarked to acquire the property, according to the complaint.
"If the Triangle venture was unsuccessful and Perpetual failed, the depositors would be protected by federal deposit insurance and the risk of loss would be born by the FSLIC," the complaint said. "If the Triangle venture was successful, the defendants would reap enormous profits and move on to other ventures."
The complaint, charging fraud, racketeering, securities fraud, negligence and breach of fiduciary duty, also alleges that Perpetual's principals used funds from the S&L to pay their personal debts.