Knapp Seeks to Buy FCA Problem Loans

Charles W. Knapp, who was ousted as the chairman and chief executive of Financial Corp. of America last summer, is trying to buy FCA’s large pool of troubled loans, his successor, William J. Popejoy, confirmed Thursday.

Knapp, who now runs his own Los Angeles-based financial-services firm known as Trafalgar Holdings Ltd., is working with other unnamed investors, Popejoy said.

Knapp declined to comment.

Although the value of the offer isn’t known, it would have to be substantial because FCA had problem properties valued at more than $1 billion as of Sept. 30, 1984, according to the company’s latest filing with the Securities and Exchange Commission.

That included $593 million in loans at least 60 days delinquent and $292 million owned through foreclosure.

May Be Valuable

However, it’s believed that the book value of those loans will be substantially reduced when the company releases its financial statements for 1984.

Those statements are expected to be released today.

Although the loans are in trouble, Knapp apparently believes that they are quite valuable if they can be sold to other investors.

One source close to the negotiations said Knapp wants to buy the loans at slightly above their new, marked-down value.

Popejoy said it remains unclear whether Knapp wants to acquire all or just part of the troubled-loan portfolio.

“I’m not sure where he is coming from yet,” he said.

Trafalgar Holdings has written FCA several letters, the executive said, the last of which was reviewed by FCA’s board of directors this week.

“We’re listening,” Popejoy said.