Seeks Promised $1.5 Million : Bank of San Clemente Sues Developer

The Bank of San Clemente, still trying to recover from losses that started mounting when the real estate market hit a slump in 1983, has sued a Woodland Hills developer who had promised to infuse the bank with $1.5 million but has not come up with the funds.

In suing Michael Goland for nearly $2.3 million, the bank is continuing to negotiate with him but is also pursuing other investors--including other banks--to pump up its capital base or buy the institution, said Michael Dunahee, president of the bank.

“We have a rather astounding number of interested parties,” Dunahee said. “We have a total of 20 groups of potential investors.”

Dunahee said the bank, which had $43.6 million in assets at the end of last year, has since reached the break-even point in earnings and expects to return to profitability in the second half of the year. It lost $1.2 million in 1985 and $302,000 last year.

Its ratio of capital to assets has fallen to 3.4%, he said, so it would take $1.5 million in new capital to raise it to the 7% level desired by regulators.

Goland planned to use “cash on hand” to buy 750,000 newly issued shares of San Clemente Bancorp stock at $2 a share, according to his application to buy control of the company. He also would have assumed the holding company’s capital debt of $763,879 and accrued interest of more than $100,000.

The developer was to be a passive investor who would keep the current management and board of directors and would not move the bank out of San Clemente.

But Goland still needs to file audited year-end financial statements, Dunahee said, to complete his application, and he needs to write a check.

The Orange County Superior Court lawsuit charges Goland and others with fraud, breach of contract and bad faith in failing to go through with the deal within a reasonable amount of time.

“We are obligated to pursue the lawsuit,” Dunahee said. “It’s just us realizing the regulators are patient, but knowing we have to exercise every option at our disposal.”

He said Goland, who could not be reached for the last week for comment, still wants to go through with the deal but is not sure he can complete it soon.

“We’re talking with others, but he still has the inside track,” Dunahee said.