American Diversified Will Cut Staff by 170 : Sale of Real Estate Properties, Technical Activities Unit Also Planned

In an effort to generate cash, American Diversified Savings Bank plans to lay off nearly 170 more employees and sell about 15 real estate properties and its technical activities division, which invested in some of the untraditional assets that drew the wrath of state and federal regulators and contributed to the S&L;’s recent insolvency.

The technical division’s physical assets include several windmill farms in Northern California. The division’s 170 employees will be laid off when the unit is sold, said Thomas Haupert, president of the savings and loan.

“We’re trying to sell the tech division as a continuing business,” Haupert said. “It’s been draining our operations.”

He said the windmill farms are losing money, the unit’s energy-generation plant in Chino is not operating yet and its ethanol plants in Iowa and Nebraska are nearly at the break-even point.

American Diversified also is selling about 15 fully developed apartments and commercial properties, including a shopping center in Palm Springs.

Including 31 employees laid off last week, the proposed staff reduction will affect about half of American Diversified’s remaining workers. Most of the people work at the S&L;’s Costa Mesa headquarters, Haupert said.

Staff Reduced to 470

The S&L;, which regulators declared insolvent and seized last February, had about 700 employees at the time. Staff reductions soon after cut that number to about 470.

Haupert--who operates the S&L; under a management contract with the Federal Savings and Loan Insurance Corp.--also acknowledged that American Diversified, with only one branch in Lodi, “will never be a traditional savings and loan.” Under former operators Ranbir S. Sahni and Lester G. Day, it had operated more as a development company as it bought properties and sought investors to participate in syndications that would own, develop and manage the properties.

Sahni had created such a complicated tier of subsidiaries and partnerships involving the S&L; that industry consultants have estimated that regulators will lose up to $300 million winding down the syndications and getting the S&L; in shape to be sold to another institution.

As part of that effort, Haupert said he is trying to sell off assets to generate cash flow and to make the S&L; leaner and less expensive to operate. The S&L; had $977 million in assets when it was seized and $865.6 million at the end of June.