FSLIC vs. American Diversified : 2 Former S&L; Officials’ Assets Frozen
The assets of two former top executives at Costa Mesa-based American Diversified Savings Bank were frozen indefinitely Monday by a Los Angeles federal judge.
Acting on a request by the Federal Savings and Loan Insurance Corp., which seized the S&L; on Feb. 14, U.S. District Judge Robert M. Takasugi issued an order prohibiting former Chairman Ranbir S. Sahni and former President Lester Day from selling, transferring or assigning certain properties and money.
Since the government declared American Diversified insolvent and placed it in conservatorship, the S&L; has been operated by a management team from Pacific Savings Bank of Costa Mesa.
The preliminary injunction bars Sahni from selling a high-rise office building he owns in Lakewood, Colo. The government claims Sahni purchased the property improperly and received a $500,000 payment when the deal was completed, according to a lawsuit filed against Sahni and Day by the FSLIC in February.
The order prohibits Day from disposing of any interest in a limited partnership he is involved in. It also prohibits him from using $75,000 on deposit in an account with the Merrill Lynch brokerage firm and $56,052 on deposit with the Bank of America.
Takasugi granted the motion in part because Sahni violated a Dec. 20, 1985, Federal Home Loan Bank order prohibiting the payment of any bonuses to any executive earning more than $80,000 a year.
Day, who earned $195,000 a year, received a $61,500 bonus on Dec. 31, and a $348,000 bonus on Jan. 8, according to the court order.
“At the times the bonus sums were paid to defendant Day, (American Diversified) was probably insolvent or suffering financial difficulties such that the payments were a breach of fiduciary duty,” the judge wrote.
Attorneys for the FSLIC argued in a recent court hearing that they needed the order to prevent Sahni and Day from using money that allegedly belonged to the S&L.;
Attorneys for Sahni and Day told the judge their clients needed the funds to pay attorneys fees and operate other business ventures they are involved in.