Bailout Agency Cancels Sale of S&L; Properties

Federal savings and loan bailout officials said Monday that they have canceled the much-promoted international satellite auction of million-dollar properties inherited from bankrupt savings and loans.

L. William Seidman, chairman of Resolution Trust Corp., said the auction was canceled after the Auction Co. of America, which the agency had hired, did not contribute to a joint promotion fund.

“The group we contracted with couldn’t fulfill their end of the deal,” Seidman said in a telephone interview.

Jim Gall, chairman of the Miami-based Auction Company of America, disputed Seidman and accused the bailout agency of bungling the auction.

He said his firm has spent nearly $2 million over four months to prepare for the event, about what it was obligated to spend.

The auction was to be held Nov. 15 in Dallas, with satellite hookups to bidders in nine other U.S. cities as well as Tokyo and London.

The RTC had hoped to sell 71 properties valued at $300 million. The auction was a centerpiece for what the agency had billed as its “great fall inventory clearance sale” aimed at drastically slimming its ballooning inventory of S&L; assets.

“We hope to start over. . . . It’s going to slow us up a little but, but I don’t think it’s a major blow,” Seidman said.

Gall faulted the RTC for failing to set minimum prices for the properties and for withdrawing three properties from the auction list and selling them through other methods.

Gall said potential buyers must have some assurance the properties will remain on the auction list or they will be unwilling to spend thousands of dollars on the environmental, engineering and appraisal reports needed to offer an intelligent bid.

“We’ve lost investor after investor,” Gall said in a telephone interview.