Keating Cuts His Salary to $1 in Bankruptcy

Developer Charles H. Keating Jr., head of the bankrupt American Continental Corp. and the subject of numerous lawsuits and criminal probes, has cut his salary to $1 a year, the Arizona Republic reported today.

Records filed last week in the company’s Chapter 11 bankruptcy case showed that Keating carried through with a promise made last year to reduce his $400,000 annual salary to a token $1, the newspaper said.

Keating had claimed in a national television broadcast in January that he and his family were “flat broke.” He said his family had been ruined, in part, because of heavy investments in the company.

Federal officials and investors in American Continental have filed fraud and racketeering suits totaling more than $1.3 billion against Keating and other American Continental officials.

Keating and other company officers reduced their salaries at the request of the committee of unsecured creditors in the American Continental bankruptcy.

Along with Keating’s pay cut, the bankruptcy records also showed that Keating’s son, Charles H. Keating III, and his son-in-law, Robert Hubbard Jr., have been taken off the payroll. The younger Keating, an executive vice president, and Butler, a vice president, both had been receiving $250,000 annually as of last April.

The Republic said federal investigators are trying to determine if Charles Keating Jr. and other company executives may be drawing salaries from at least eight American Continental subsidiaries that are not covered by the bankruptcy proceedings.

Ronald Warnicke, a court-appointed examiner in the bankruptcy case, was expected to submit a report about the finances of the subsidiaries March 21 to U.S. District Judge Richard Bilby.