The owners of two failed Orange County savings banks are butting heads over a one-time dump site for hazardous waste in Carson, and the federal agency that sued both of them after seizing their S&Ls; has been forced to take sides in the dispute.
The owners, Ranbir S. Sahni and Robert A. Ferrante, are fighting over a 157-acre parcel--still listed as a hazardous site by the state--that Ferrante sold to Sahni in an October, 1985, transaction valued at $41 million.
Ferrante, who was sole owner of the defunct Consolidated Savings Bank in Irvine, is trying to foreclose on the land on his own behalf because he believes he has an interested buyer and because Sahni, who owns 96% of American Diversified Savings Bank in Costa Mesa, has failed to keep up payments on the property.
Sahni acknowledged that he made just two scheduled payments after putting down $3 million to buy World Development Corp., which owns the Carson property through a series of subsidiaries. But he would not elaborate on the matter.
To stall the foreclosure, Sahni caused World Development Corp. to file for protection from creditors under Chapter 11 of the federal bankruptcy laws, said Robert L. Kinkle, a Huntington Beach lawyer representing Sahni and his company.
In the bankruptcy filing, World Development lists the land as its only asset and $43 million in liabilities.
The Federal Savings and Loan Insurance Co., which seized both S&Ls; in 1986 and soon closed Consolidated, also wants to block the foreclosure. The agency contends that Ferrante assigned all his rights in the Carson property to his S&L; and that the land parcel is now the only major asset of Consolidated, which FSLIC is liquidating.
FSLIC first tried to halt Ferrante's foreclosure on Sept. 8, when attorneys for the agency asked U.S. District Judge Mariana R. Pfaelzer in Los Angeles to block the action; she refused.
Instead, Pfaelzer insisted that the parties consider a settlement, and she even participated in a settlement conference last Thursday.
No settlement has been reached, but discussions are continuing, said Stephen T. Owens, a Los Angeles lawyer representing FSLIC.
Ferrante wants the property back because BCE Development Corp., a Canadian company, is interested in buying it, said his attorney, Brian C. Lysaght of Santa Monica. Independent appraisals of the land range from $6.2 million up to $117 million, he said.
"Our people were not surprised when World Development filed for bankruptcy," Lysaght said. "BCE and Ferrante will deal with Sahni in the bankruptcy court proceedings now that Judge Pfaelzer has, in essence, given us a green light to foreclose."
Lysaght said the BCE purchase hinges on whether the former landfill can be adequately cleaned up to permit commercial development. The land is listed as a hazardous site by the state Department of Health Services.
Sahni said he will resist Ferrante's bids to foreclose on the property.
As part of the purchase agreement, Sahni put $3 million down, assumed $16 million in liabilities and $17 million in notes and agreed to pay Ferrante $5 million for a five-year consulting contract.