Minority Firm Asks to Buy 51% Stake in Ailing Family S
A minority-owned Washington investment firm is seeking regulatory approval to buy the 51% stake in Family Savings & Loan now held by Oliver A. Trigg Jr., a controversial Los Angeles businessman ousted as the thrift’s chairman last year.
If approved, the transaction would help improve the Los Angeles-based S&L;’s weak financial condition and keep one of the nation’s largest black-owned thrifts under minority ownership.
The details of the proposed transaction weren’t disclosed, but persons familiar with the deal said Opportunity Funding is expected to pay just under $1 million for Trigg’s shares. Trigg paid $1.2 million for the stock two years ago.
Opportunity Funding is a small venture capital firm with investments in black-owned cable television stations and a North Carolina industrial park. C. Robert Kemp, president of Opportunity Funding and a former director of Safeway Stores, declined comment on his plans for Family Savings until federal thrift regulators completed their review.
But Family Savings Chairman William Shearer said Opportunity Funding has an ambitious plan to develop a financial services network around Family, based in Los Angeles’ Crenshaw District.
If the sale is approved, Opportunity is expected to inject an undetermined amount of money into Family Savings to improve its weak financial condition. Family falls below new federal capital standards that are used to measure a thrift’s health.
Trigg, a real estate executive who joined Family’s board in 1986, was ordered to sell his shares after a lengthy federal investigation into possible fraud at the thrift. The secret investigation was prompted by an October, 1987, Times story that said a company formed by Trigg sold land to Family Savings for a large profit.
Trigg denied that he made money on the land deal, which involved a residential tract in Whittier’s exclusive Friendly Hills development. But in a suit filed against Trigg earlier this year, Family Savings claimed that Trigg used profits from the land deal to buy his Family Savings stock.
Family Savings put the land up for sale but has never recovered its $5-million investment. Under the terms of Trigg’s confidential agreement with federal thrift regulators, any money he receives from the sale of his stock must revert to Family Savings to make up for its losses on the Whittier land.
Trigg’s lawyer, Arthur Barens, said his client is unaware of the pending stock sale, which was negotiated by UCLA law professor Reginald Alleyne, the government-appointed trustee. “No one has given us official notice,” said Barens. “I don’t see how they can proceed with the sale without giving us notification.”
Alleyne declined comment.
