American Diversified Savings Bank

The U.S. Supreme Court, in cases stemming from failed thrifts in Orange County and Texas, made it harder for federal regulators to sue lawyers and accountants on malpractice claims and cut off most lawsuits that are not filed within state-mandated deadlines. The nation's high court decided unanimously that state common law, not a small area of federal common law, should be used in most lawsuits brought by regulators against professionals.

The U.S. Supreme Court, in cases stemming from failed thrifts in Orange County and Texas, made it harder for federal regulators to sue lawyers and accountants on malpractice claims and cut off most lawsuits that are not filed within state-mandated deadlines. The nation's high court decided unanimously that state common law, not a small area of federal common law, should be used in most lawsuits brought by regulators against professionals.

Less than a week after seizing American Diversified Savings Bank of Costa Mesa, federal regulators filed a $76.6-million lawsuit against Ranbir Sahni, American Diversified's controversial majority owner and former chairman, and Lester Day, the S&L's former president, alleging the two committed various acts of fraud and racketeering while officers of the failed S&L. The Federal Savings and Loan Insurance Corp.

Thomas J. Haupert is no stranger to troubled savings and loans. He ran American Diversified Savings Bank for federal regulators until the Costa Mesa thrift was closed in June. Now, he is acting president of Antelope Valley Savings & Loan in Lancaster, which lost $5.5 million in the first 9 months last year. The S&L's capital base fell to 2.5% of its $320 million in assets at the end of September. But Haupert said Antelope Valley Savings "can work its way out of its problems."

Court Reinstates Suit Against O'Melveny & Myers: The U.S. 9th Circuit Court of Appeals reinstated a malpractice lawsuit against California's fifth-largest law firm for its work on two real estate syndications for now-defunct American Diversified Savings Bank in Costa Mesa. The appellate court reversed a lower court's dismissal of a suit brought by the Federal Deposit Insurance Corp.

A sister company of Costa Mesa-based American Diversified Savings Bank has sought protection from creditors under Chapter 11 of the federal Bankruptcy Code, according to court documents. In filing for protection earlier this month in U.S. Bankruptcy Court in Santa Ana, American Diversified Equity Corp., a securities firm owned by the bank's former chairman, Ranbir S. Sahni, is claiming $147,413 in total liabilities and assets worth an estimated $700,000 in contingency funds.

In an end-run around federal regulators who seized control of his savings and loan firm nearly two years ago, ousted American Diversified Savings Bank owner Ranbir Sahni has regained at least temporary control of nearly 25% of the ailing institution's assets.

Federal regulators have been warning in recent months that everyone is suspect in their investigations of failed savings and loans. The giant Los Angeles law firm of O'Melveny & Myers has found just out how stubborn regulators can be. The firm has been fighting a malpractice lawsuit that regulators filed over two real estate syndications that its Newport Beach office handled for a subsidiary of the now-defunct American Diversified Savings Bank in Costa Mesa.

The Supreme Court, agreeing to hear an appeal from a prominent Los Angeles law firm, said Monday that it will decide whether attorneys and accountants can be held liable for the failure of a savings and loan institution. Government lawyers said they have pending claims amounting to more than $1.5 billion that hinge on the question. Since the collapse of scores of S&Ls, lawyers for the Federal Deposit Insurance Corp.

Court Reinstates Suit Against O'Melveny & Myers: The U.S. 9th Circuit Court of Appeals reinstated a malpractice lawsuit against California's fifth-largest law firm for its work on two real estate syndications for now-defunct American Diversified Savings Bank in Costa Mesa. The appellate court reversed a lower court's dismissal of a suit brought by the Federal Deposit Insurance Corp.

A federal appellate court in Los Angeles reinstated a malpractice lawsuit Monday against California's fifth-largest law firm for its work on two real estate syndications for now-defunct American Diversified Savings Bank in Costa Mesa. The U.S. 9th Circuit Court of Appeals reversed a lower court's pretrial dismissal of a suit brought against O'Melveny & Myers by the Federal Deposit Insurance Corp., acting as receiver for the savings and loan.

The state's chief savings and loan regulator criticized his federal counterparts Tuesday for withholding information from the public about the settlements of lawsuits in two high-profile Orange County thrift failures. William D. Davis, commissioner of the state Department of Savings and Loan, said taxpayers are paying for the failures of the S&Ls and thus should be told the details of settlements with owners of defunct American Diversified Savings Bank and Consolidated Savings Bank.

Former owners of two defunct Orange County savings and loans said Tuesday that they have nothing to fear from a twice-convicted bank swindler who has agreed to testify about allegedly phony deals he had with their thrifts. Charles J. Bazarian Jr., an Oklahoma loan broker already serving a two-year term for a 1987 bank fraud conviction, is expected to plead guilty today in Oklahoma City to charges he defrauded the two S&Ls and the U.S. Department of Housing and Urban Development.

Federal regulators have settled all civil lawsuits, including claims of racketeering and fraud, against the former owners and operators of American Diversified Savings Bank and Consolidated Savings Bank, authorities said Monday. The FBI, however, is continuing separate criminal investigations of the two defunct Orange County thrifts, which failed in 1986.

Federal regulators have been warning in recent months that everyone is suspect in their investigations of failed savings and loans. The giant Los Angeles law firm of O'Melveny & Myers has found just out how stubborn regulators can be. The firm has been fighting a malpractice lawsuit that regulators filed over two real estate syndications that its Newport Beach office handled for a subsidiary of the now-defunct American Diversified Savings Bank in Costa Mesa.