In an end-run around federal regulators who seized control of his savings bank nearly two years ago, ousted American Diversified Savings Bank owner Ranbir Sahni has regained control of nearly 25% of the ailing institution's assets.
Sahni, who created a complex pyramid of real estate investment businesses under the umbrella of the Costa Mesa-based savings bank, fought off a court challenge Friday to his management of 41 investment syndicates that own $171 million worth of rental properties in 22 states.
Sahni in 1984 entered the properties on the savings bank's books as assets.
The syndicates are limited partners in a Sahni-owned company--American Diversified Partners--that effectively has been controlled by the federal government since February, 1986, when the Federal Savings and Loan Insurance Corp. was named conservator of American Diversified Savings Bank.
While American Diversified Partners is not directly linked to the savings and loan, it had been managed until last week by American Diversified Investment Corp., a wholly owned subsidiary of the institution. Sahni's attorney, Ronald E. Gregg, said Monday that the properties were worth a total of $171 million and last year grossed nearly $20.2 million before expenses, taxes and depreciation created a $7.6-million loss.
On Oct. 3, Sahni claimed that ADIC was insolvent, Gregg said, and, acting under the terms of the partnership agreement between ADIC and American Diversified Partners, ousted ADIC as general partner and named himself to the post.
ADIC, saying it was not insolvent, sought an Orange County Superior Court order Friday to halt Sahni from acting as ADP's general partner, from transferring any ADP-managed property and from taking any money from ADP.
Superior Court Commissioner Eleanor Palk denied ADIC's request to stop Sahni from acting as general partner and hiring a management company for the properties.
Palk did, however, order Sahni not to take any money from ADP and not to sell any property pending a full hearing--set for Oct. 26--on the legal issues.
Thomas Haupert, president of the savings and loan, said Monday that he believes that Sahni named himself general partner of American Diversified Partners to circumvent previous Bankruptcy Court rulings that had removed him from an active role in managing the investment properties.
Sahni has been tangling with regulators in a series of suits and bankruptcy actions since they seized American Diversified Savings and its subsidiaries. To date, the savings and loan and the Federal Savings and Loan Insurance Corp. have paid more than $10 million in legal fees related to the takeover and to suits involving Sahni.
The FSLIC, as conservator of the savings bank, sued Sahni in U.S. District Court in Los Angeles shortly after the takeover, alleging fraud and mismanagement in the operation of the savings bank, which once had $1 billion in assets and still has more than that in liabilities.
In July, Sahni sued the savings bank and American Diversified Investment Corp. and American Diversified Partners, saying they purposely failed to pay him interest, fees and other income due on the limited partnerships, which had formed and then merged into the savings and loan. He claimed that regulators were trying to cripple him financially to prevent him from fighting them.
The common thread to the complex businesses Sahni pulled together under the umbrella of the savings and loan is that he had a personal or beneficial interest in almost every one of them. He owns 96% of the bank, created American Diversified Investment Corp., owns 90% of ADP and owns partnership interests in many of the syndications.
Since the takeover, he has put two other companies, American Development Corp. and American Diversified Equities Corp.--both of which he owned separately from the bank--into Bankruptcy Court.