FDIC Files Lawsuit: The Federal Deposit Insurance...

FDIC Files Lawsuit: The Federal Deposit Insurance Corp. has sued 19 former directors and officers of Pacific Savings Bank and three of its real estate subsidiaries, claiming that their negligence and breaches of fiduciary duties led to the collapse of the Costa Mesa-based savings and loan. The suit, filed in U.S. District Court in Los Angeles, seeks at least $70 million for losses sustained at Pacific Savings through what the suit alleges was their “excessively risky endeavors,” “negligent lending and investment practices” and “excessive and abusive” compensation for top executives. Also named in the lawsuit are two appraisers and a Colorado appraising firm. FDIC, which is operating the S&L;, claims they “grossly overstated” the value of Texas and Colorado apartment complexes that the S&L; invested in or used as security for loans.