Federal regulators said Thursday that they plan to sell the major insurance operation of Irvine-based Lincoln Savings & Loan to a Dallas investment firm. The price was not disclosed.
The insurance operation is part of a Lincoln subsidiary that filed for bankruptcy court protection on April 13, along with Lincoln's parent company, American Continental Corp., and 10 other S&L subsidiaries. Lincoln was seized by regulators the next day.
Regulators said they intend to sell Continental Fidelity Insurance Co. and its operating unit, American Founders Life Insurance Co., to Zlogar & Co.
Zlogar had been negotiating with Phoenix-based American Continental to purchase the insurance operation before American Continental filed its Chapter 11 bankruptcy petition. Under the bankruptcy filing, executives at American Continental remain in control of the holding company, but regulators control the Lincoln subsidiaries.
The purchase price in the current deal was not revealed, but it is all cash and higher than the value of the cash-and-notes deal that Zlogar had worked out with American Continental, said Al Zlogar, the Dallas firm's president. The value of the previous deal was a little less than $45 million, he said.
The deal still must be approved by the U.S. Bankruptcy Court in Phoenix.
"We're elated," Zlogar said. "The insurance companies are healthy and rated A-excellent by A.M. Best Co. (an industry rating firm). We intend to maintain that rating or better it."
The decision to buy the insurance operation, he said, was "95% based on the management of company." He said he was "very impressed" with current managers, who would remain in place after the purchase and help expand the company.
American Founders, with $300 million in assets, is licensed in 37 states and operates in 23.
Mark M. Connally, an American Continental spokesman, said it was too early to know if the company would object to the proposed sale.