Butterfield Equities Future Is Bleak, Shareholders Told

Butterfield Equities Corp., the one-time holding company for Butterfield Savings & Loan Assn. in Santa Ana, remains a shell company with few assets and a bleak future, according to a letter the company sent Tuesday to its 3,800 shareholders.

Donald W. Endresen, the Butterfield Equities president and former head of the S&L;, has been trying to keep the holding company afloat as he battles federal regulators over the ownership of assets he estimates at $3 million to $5 million. The Federal Savings and Loan Insurance Corp. seized Butterfield S&L; 14 months ago and declared it insolvent.

Endresen is also fighting an $85.5-million lawsuit that the FSLIC filed in U.S. District court in Los Angeles against him and other company officials on June 12. The civil lawsuit accuses them of fraud, conspiracy and mismanagement of the S&L.;

In the company’s letter to shareholders the outspoken Endresen lambastes federal regulators for harassing company executives, wasting S&L; assets and disregarding shareholder interests.

Even without its primary subsidiary--or much of anything else--the company would consider filing for bankruptcy “only as a last measure,” Endresen said in the letter.

After seizing Butterfield S&L; in August, 1985, regulators ousted Endresen and other top S&L; executives, transformed the S&L; into a new federal savings institution and hired a team of executives from Downey S&L; Assn. in Costa Mesa to manage it. At the time, Butterfield Savings had about $800 million in assets, had lost more than $40 million in two years and had a negative net worth of $10 million.

Butterfield Equities was not part of the takeover, and Endresen has remained in charge of it. He claims that the company owns certain real estate and two mortgages that the reconstituted Butterfield Savings and the FSLIC now control.

The FSLIC has refused to return possession of a 60-acre farm that the corporation owns in southern Riverside County, Endresen said in an interview. He said the regulators also have been withholding company records that would allow Butterfield Equities to file an annual financial statement.

A spokesman for the regulatory agency said that because of the pending litigation in U.S. District Court, the FSLIC and its parent agency, the Federal Home Loan Bank Board, would not comment on Endresen’s claims.

Until the suit is resolved, Butterfield Equities will “remain relatively inactive,” Endresen’s letter said.

The letter estimated the worth of the company’s stock at 10 cents to 25 cents, or, with 3.2 million shares outstanding, between $320,000 and $800,000. Its most significant asset now is $30 million in tax losses that could be used to shelter future income, he said in the interview.

Most of the three-page letter and accompanying material was devoted to an attack on the FSLIC, the bank board and Edwin J. Gray Jr., the bank board chairman.

Endresen called on shareholders to contact U.S. legislators and complain about the federal regulators’ “continuing, carefully crafted and systematic program of harassment used on hundreds of savings and loan associations.”