HOUSTON — Federal regulators filed charges Tuesday against Maxxam Inc., the predecessor and chairman of which were part-owners of the failed United Savings of Texas.
The U.S. Office of Thrift Supervision filed the charges in Washington, D.C., against the Houston-based aluminum, forest products and real estate company, Chairman Charles E. Hurwitz and other parties that it said contributed to the thrift's failure in 1988.
The demise cost taxpayers more than $1.6 billion, the agency says.
Hurwitz, a Houston financier, was chairman and chief executive of United Financial Group, parent company of United Savings. Maxxam's predecessor, MCO Holdings Inc., was a shareholder in United Financial.
Maxxam said the charges are baseless.
"The notice of charges issued by the OTS is totally without merit and Maxxam Inc. will vigorously appeal this proposed administrative action to the courts," the company said in a statement.
The OTS alleges that the respondents engaged in unsafe and unsound practices and regulatory violations that contributed to the failure.
Regulators claim Maxxam had a duty to maintain the net worth of United Savings.
The OTS is asking for $839,000 in civil penalties and an unspecified amount of restitution. The agency also seeks to prohibit all six individuals named from working in the banking industry.
The individuals charged, all one-time directors or officers of United Savings and United Financial, are Barry A. Munitz, Jenard M. Gross, Arthur S. Berner, Ronald Huebsch and Michael Crow.
Also charged is Federated Development Co., a New York business trust.
A hearing will be scheduled before an administrative law judge. Respondents have 20 days to answer the charges.
In August, the Federal Deposit Insurance Corp. sued Hurwitz for $250 million and accused him of risky deals at United Savings. The FDIC said he artificially maintained the net worth of United so the thrift could continue to buy high-risk junk bonds from the now-defunct Drexel Burnham Lambert securities firm.
Maxxam said it has filed a motion in federal court in Houston to intervene in that lawsuit. The company said it is supporting a separate motion by Hurwitz that the OTS be enjoined in the FDIC proceeding.