Lincoln S&L; Stake in TCS to Be Resold : Thrifts: The San Diego financial services firm will buy back its shares for just 30% of their original prices--much too low, critics of regulators say.
Regulators running insolvent Lincoln Savings & Loan have agreed to sell the Irvine thrift’s stake in TCS Enterprises back to the San Diego financial services firm for 30% of the original price, the company’s chairman said Tuesday.
A spokesman for Lincoln’s former parent company immediately criticized regulators for selling too cheaply.
TCS will pay $1.50 a share, or $867,000, to buy back the 20% interest that Lincoln acquired in the firm in January, 1985. The S&L; originally paid $5 a share, or nearly $2.9 million.
Thomas C. Stickel, chairman and chief executive of the firm that bears his initials, said regulators rejected his offer to pay the S&L; the original purchase price because the terms included payments over 10 years.
The federal Resolution Trust Corp. “wanted a cash offer, which we eventually settled upon at $1.50 per share,” Stickel said in a prepared statement. He could not be reached for further comment Tuesday.
The company, which spent a year negotiating the sale with regulators, said it will retire the shares.
Regulators also could not be reached for comment.
The price of TCS stock closed in over-the-counter trading Tuesday at $2 a share, unchanged from Monday’s close.
“This is a great deal for TCS and a terrible deal for the taxpayers,” said Bradley J. Boland, a spokesman for American Continental Corp. in Phoenix. American Continental owned Lincoln when regulators seized the thrift on April 14, 1989, a day after the company filed for a bankruptcy reorganization.
Boland said the purchase price is too low.
“This is another example of how the taxpayers are being pillaged by the federal government’s incompetence and inability to maximize values for Lincoln’s assets,” he said.
TCS is the company that hired Lawrence W. Taggart in late 1984 from his job as commissioner of the state Department of Savings and Loan. Taggart introduced Stickel to Charles H. Keating Jr., American Continental’s chairman.
Keating decided to help TCS after his talk with Stickel. The $2.9-million investment in TCS was more than half the $4.3 million that the San Diego company had raised in a stock offering. It bolstered the then-18-month-old firm, which had lost about $1 million in costs associated with starting the firm.
While TCS has been profitable since, it is expected to announce soon substantially lower earnings for its fiscal second quarter, which ended April 30.
TCS has recently been losing money on a mortgage packaging arrangement the company has with Great American Bank, a struggling San Diego savings and loan that has been crippled from its Arizona real estate operations.
Times staff writer Chris Kraul contributed to this story.