A California investor group that once had the inside track in acquiring Lincoln Savings & Loan has been rejected by state regulators for failing to complete its application for control of the Irvine-based S&L; in a timely fashion.
The group, headed by longtime industry executive Spencer Scott of Glendale, has had trouble obtaining written commitments from investors who were to put up $50 million as part of the December agreement to acquire Lincoln from American Continental Corp. in Phoenix.
Meanwhile, its deadline to complete the application, as well as its deadline to negotiate a final agreement with American Continental, ran out.
On March 8, a group of American Continental and Lincoln insiders, plus company consultant John Rousselot, a former U.S. congressman from San Gabriel, filed its application to buy the S&L; after working out a purchase agreement similar to Scott’s deal. Both deals involved a stock transaction valued at $288.75 million plus the $50 million in cash for new capital.
“We never got a completed application” from the Scott group, said William J. Crawford, commissioner of the state Department of Savings and Loan. “We sent them a letter and told them where the application was incomplete and gave them 30 days to complete it. When they didn’t, we deemed it complete and denied it.”
The Rousselot group’s application also is incomplete, he said, and it has until April 21 to fill in the holes.
Ernest Leff, a Los Angeles lawyer who is one of the investors in the Scott group, said the group has been waiting to get a written commitment from a lender who orally agreed to provide about $25 million of the needed funds.
Also, certain information regarding American Continental’s preferred stock position in Lincoln after the sale also had not been delivered, he said.
“I’m very hopeful that we’ll have all our resources together at the end of this week,” Leff said. “If so, we’ll look at where the other applicants are and we’ll talk to” American Continental.
The Scott group doesn’t plan to compete with the insider group, he said, but “will be there” if the insider deal sours.
Lincoln had $5.46 billion in assets at the end of 1988.