Advertisement
 
YOU ARE HERE: LAT HomeCollectionsLawsuit
(Page 3 of 3)

Legal Woes Piling Up in S&L's Failure : Regulators Expect to Add Defendants

October 04, 1987|JAMES S. GRANELLI | Times Staff Writer

"You and I have got to get together prior to your answering any questions regarding the matters you discussed with Doc," her Aug. 29, 1986, letter to the Newport Beach broker stated. "Your story should go something like this" followed by a list of nine items the broker should include in his story.

The South Lake Tahoe condominium, Kingsbury of Tahoe, had been a thorn in the side of state regulators almost since North America Savings opened its doors, because Christensen had contributed the equity in the building to the S&L's capital base and was trying to inflate its value, state regulators have said in court papers.

The FSLIC suit said a Newport Equities subsidiary called Tahoe Bronze bought Kingsbury for $3.7 million in December, 1982, and sold it a year later to the S&L for $14.7 million. The suit alleged that the condominium project was worth just $2.4 million.

In addition, Christensen and McKinzie diverted about $5.6 million in S&L funds to pay off an existing mortgage on the property, the suit alleged, but the mortgage holder never received the money.

Advertisement
Los Angeles Times Articles
|
|
|