Bernard B. Katz, the Los Angeles financier who built two fast-growing high-tech companies that subsequently flopped, has sued Bank of America and Downey Savings & Loan Assn. in Costa Mesa for $315 million, alleging breach of contract in their liquidation of a third company in which Katz owns a 45% interest.
The financial institutions are trying to recover $15 million in loans made to Helionetics of Irvine, a once-soaring laser firm that Katz bankrolled. Helionetics last year filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
Katz alleges in his Orange County Superior Court suit that Bank of America has forced Helionetics to sell substantially all the assets of HLX Laser, a company that Katz and Helionetics created to develop laser technology. Helionetics owns 55% of San Diego-based HLX, which has not filed for bankruptcy.
Approval of a reported $4.2-million sale of HLX assets to General Dynamics in St. Louis is pending in bankruptcy court in Santa Ana.