BANKING / FINANCE

Seizing the initiative from federal regulators, the parent company of Lincoln Savings & Loan in Irvine has filed a reorganization plan in U.S. Bankruptcy Court for a key Lincoln subsidiary, Amcor Funding Corp.

Regulators had the exclusive right to file a reorganization plan for Amcor Funding and other Lincoln subsidiaries within four months of the bankruptcy filings, but failed to do so. After the exclusive period ended last month, any interested party could file plans.

By filing the reorganization plan for Amcor Funding, American Continental Corp. forces regulators to try to kill the plan or come up with their own--an area in which they are inexperienced.

Amcor Funding owns a life insurance company and holds a 20% stake in an international investment firm.

When American Continental filed its Chapter 11 bankruptcy petition on April 13, its lawyers also filed petitions for Amcor Funding and 10 other Lincoln subsidiaries. By law, the parent could not put Lincoln into bankruptcy, and regulators seized the S&L; on April 14.

Amcor Funding is also an integral part of American Continental’s reorganization plan, which was filed two months ago. That plan calls for American Continental and Amcor Funding to become part of a new firm called Phoenix Holdings, and all creditors of American Continental would be paid in full--though at a lower interest rate and over a longer time period.

The reorganization proposal for Amcor Funding similarly calls for it to become part of Phoenix Holdings.