ICA President Thygerson Agrees to Quit
Kenneth Thygerson, the embattled president of Imperial Corp. of America, has agreed to step down as president and chief executive of the parent firm of Imperial Savings of California. He will be replaced temporarily by Allan R. Tessler, an ICA board member.
ICA also said it expects to release Wednesday a detailed restructuring plan to put the savings and loan in compliance with anticipated new capital requirements to be included in the congressional S&L; bail-out bill.
Thygerson, whose resignation is effective immediately, did not return phone messages left Monday, and ICA declined to comment on the circumstances behind the resignation other than to say it came as the result of “mutual agreement” between Thygerson and ICA’s board of directors.
Thygerson, 44, was coming under increasing fire from federal regulators. Since joining ICA in September, 1985, after heading up the Federal Home Loan Mortgage Corp., known as Freddie Mac, for three years, he led ICA into a series of non-traditional business activities, including junk bond investments and wholesale car and mobile home loans.
But the diversifications largely misfired. Problems with its consumer loan portfolio forced ICA to set aside reserves of $109 million in its fourth quarter last year, leading to a loss of $15.6 million. Additional reserves set aside for bad loans earlier this year resulted in a slender first-quarter profit of $900,000.
Fraud-Ridden Portfolio
Many of ICA’s problems stemmed from its purchase of a fraud-ridden car loan portfolio from Grand Wilshire, which has since entered Chapter 11 bankruptcy proceedings. ICA also made bad loans to Global Motors, the U. S. importer of Yugo automobiles.
In January, ICA discontinued the consumer loan group responsible for the loans and in April announced the resignations of executives Rocco Fabiano and Steve Wright, who had headed the unit.
At the insistence of regulators, ICA in January suspended its dividend and said it would reduce assets in a bid to bolster capital as a percentage of assets. As of March 31, it had shrunk its assets to $11.9 billion, from $12.3 billion at the end of 1988.
As recently as May, Thygerson continued to defend his management strategy as a rational response to ever-narrowing profit margins available in traditional S&L; businesses such as home loans. In an interview at the time, he said that ICA was still looking for “new, higher-yield markets to enter.”
According to ICA’s most recent proxy statement, Thygerson’s employment contract calls for him to be paid upon termination, under certain circumstances, a lump sum of nearly three times his 1988 salary of $400,000. ICA spokesman Tim Larrick, however, declined to discuss specific terms of Thygerson’s severance agreement with the board.
Interim President Tessler had indirect control of 447,971 Imperial shares as of May 16, a holding of less than 3%. Tessler, 53, is a New York attorney and financier.
ICA shares closed up $.125 at $5.875 per share in New York Stock Exchange trading Monday. Thygerson’s resignation was announced after the stock markets had closed.
