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Returned S&L Chief Blaxland Feels 'Satisfaction'

July 10, 1987|JANE APPLEGATE | Times Staff Writer

Twenty-four days after being ousted as chairman of Universal Savings Bank, a victorious Christopher Blaxland reclaimed his office Thursday after an unprecedented court decision overturned the state's June 16 seizure of the financially sound S&L.

"I felt a great sense of personal satisfaction, I must say," the Australian-born Blaxland said in an interview a few hours after resuming his duties at Universal's headquarters office in Orange.

Blaxland, who spent most of Thursday meeting with key employees and regulators, said one of his priorities is to meet with a media consultant and prepare a major ad campaign to tell the public that Universal's legal problems are over.

Profitable When Seized

The state seizure of Universal received widespread publicity because it was the first time that California regulators had taken control of an S&L that was financially sound. Universal, with 10 branches in Orange and Los Angeles counties, had more than $280 million in assets and was profitable when it was seized.

"A totally new Universal, with the confidence of its shareholders, the regulators and the public, can be revealed," Blaxland said Thursday. To begin with, Universal employees received a memo outlining what happened in court on Wednesday.

Universal's problems became public June 16, when the state Department of Savings and Loan obtained a court order to seize the S&L and place it in a conservatorship.

The order, issued by a Los Angeles Superior Court judge, was based on allegations made against Blaxland and others by Universal's vice chairman, Christopher Gadsby, and president, Serge Woodruff.

The two said in a 10-page letter to regulators June 15 that Blaxland and the chairman of Unity Corp. Ltd., Universal's Australian parent company, were planning to engage in real estate transactions that might jeopardize Universal's financial health. Blaxland also serves as a director of Unity, the Sydney-based financial services company that bought Universal for about $10 million in December, 1986.

However, after a 2 1/2-day hearing on Universal's motion to overturn the conservatorship, Judge Christian E. Markey Jr. ruled Wednesday afternoon that the state had produced "no substantial evidence" to justify the takeover.

Control Ordered Returned

He ordered control of Universal to be immediately returned to Blaxland and the S&L's Australian parent company, Unity Corp. Ltd.

That marked the first time the state S&L commission had been ordered to rescind an enforcement action.

Blaxland said Thursday that he wants to put the last three weeks behind him and concentrate on running Universal.

But first he must deal with the two officers whose allegations prompted the state's actions.

Blaxland said during his Thursday meetings with regulators, including the federal supervisory agent assigned to the S&L, the discussions included his plans for Gadsby and Woodruff. The two reported for work Thursday and, according to Blaxland, were included in all the meetings with the regulators.

"However, I made it quite clear to them they will be terminated as soon as the legal technicalities are completed," Blaxland said.

In most industries, the two would have been fired within minutes of the court's ruling that the state's action--based largely on their allegations--had not been supported. Gadsby, in fact, had been suspended by Blaxland for apparently unrelated reasons June 14--the day before he went to regulators with the allegations that Blaxland was planning an improper loan transaction.

Regulated Industry

But the S&L industry is highly regulated: A Federal Home Loan Bank Board order issued two days after the state seized Universal required Blaxland to keep Woodruff and Gadsby in office--at least for the time being.

The order also restricted the size and scope of the S&L's financial transactions and required bank board approval of any changes in its board of directors or top management.

Neither Gadsby nor Woodruff could be reached for comment. But their attorney, Michael Kadish, said the two "have not lost the confidence of the staff. And regardless of what happens, they acted in the best interest of the depositors."

Blaxland said Thursday that William Davis, the deputy savings and loan commissioner who served as Universal's conservator, also met with him Thursday to discuss various matters and "formally hand over control."

Davis "didn't seem all that unhappy" when he left Universal Thursday afternoon, Blaxland said.

Davis' boss, State S&L Commissioner Crawford, said after Wednesday's court defeat that while the judge had ordered him to relinquish operational control of Universal, he intended to keep the S&L under scrutiny.

Late Thursday, a spokeswoman for Davis' office said he was not in and would be working in the department's San Francisco office today.

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