American Development Corp. Charges Conspiracy : Bankrupt Sahni Company Sues Federal Regulators
A bankrupt company owned by Ranbir S. Sahni, deposed head of the failed American Diversified Savings Bank in Costa Mesa, has sued federal regulators and others for $200 million on claims that they interfered with the operation of the company and conspired to destroy it.
The company, American Development Corp., now in Huntington Beach, had been the manager of 62 real estate investment limited partnerships that were controlled by American Diversified. Shortly after regulators seized the S&L; two years ago and ousted Sahni as chairman, the new managers hired to run American Diversified in conservatorship severed ties with ADC. Sahni’s suit alleges regulators and operators of American Diversified breached contracts with ADC by terminating its management services and wrongly interfered with its operations.
The suit alleges that the conspiracy to destroy ADC forced the company to seek protection from creditors in the U.S. Bankruptcy Court, where it is trying to reorganize its debts under Chapter 11 of the federal bankruptcy laws. The lawsuit was filed Monday as part of the bankruptcy.
Numerous Court Battles
Sahni and federal regulators--the Federal Home Loan Bank Board and its deposit insurance arm, the Federal Savings and Loan Insurance Corp.--have been locked in numerous court battles since the February, 1986, takeover. The latest suit is no surprise to the S&L.;
“It’s another harassment suit,” said Thomas J. Haupert, president of American Diversified. “It’s a fallacious suit. He keeps filing suits, and we continually win.”
But Haupert acknowledged that Sahni “does cost us money” in legal fees.
By last September, the S&L; had spent $8.1 million in legal fees to prosecute suits against Sahni and to defend itself against suits he brought.
At that time, Haupert estimated that legal fees for the S&L;’s law firm, Pettit & Martin in San Francisco, had been running about $500,000 a month. He declined Tuesday to say how much more in legal fees has been run up since September.
Sahni stepped down as chairman and president of ADC in October, turning over the operation to Lester Day, former president of American Diversified who was ousted along with Sahni. But Sahni still owns the company. He also owns 96% of American Diversified, and Day owns the remaining 4%.
The latest suit names as defendants the federal regulatory agencies involved in the takeover and operation of the S&L.; Also included as defendants are Haupert, American Diversified directors installed by regulators and three San Francisco-based regulatory agents.
