U.S. Board Fails in 2nd Bid for Court Order in Bank Fight

For the second time this week, a federal judge has refused to grant a temporary restraining order in the battle between federal regulators and Universal Savings Bank in Orange.

In court documents filed Wednesday, attorneys for the Federal Home Loan Bank Board insisted that Universal’s chairman and others were “intentionally thumbing their noses” at the bank board because Universal has stripped two dissident directors of power while awaiting bank board approval to fire them.

U.S. District Judge Terry J. Hatter Jr. reviewed the bank board’s request for a restraining order, but refused to grant it or schedule a hearing. Hatter’s clerk told the bank board’s attorneys the matter would be heard July 27, along with other Universal motions.

At issue is Universal’s efforts to fire Vice Chairman Christopher Gadsby and President Serge Woodruff after they told federal regulators and the state banking commissioner that there were problems at the Australian-owned S&L.; The two have been reporting to work under a court order, but the bank board maintains the two have not been allowed to exercise any management control.

Based on the men’s allegations of improper real estate transactions, the state seized control of Universal on June 16 and placed it into conservatorship for 24 days.

After a lengthy hearing, a Superior Court judge ruled there was nothing to substantiate the seizure and ordered that control of Universal be returned to its owners, Unity Corp. Ltd. of Sydney. Since last week, Gadsby and Woodruff have been reporting for work, but have been excluded from making decisions, according to Universal Chairman Christopher Blaxland.

“I can’t stop (Gadsby and Woodruff) from issuing orders, but those orders are not to be complied with without my approval,” Blaxland said Wednesday.

Meanwhile, attorneys for the bank board expressed their frustration at the court’s failure to act.

“We made the mistake (of believing) that when the judge refused to set aside the (bank board’s) order that Universal would obey the order,” said Gregg Golden, an attorney for the bank board’s enforcement division in Washington.