Rosewood Drops First Executive Shares at a Loss : Stock: The holding company abandons its attempt at a restructuring of the Los Angeles-based insurer, selling its 9.9% interest in the corporation.

Rosewood Financial Partners said Monday that it sold its 9.9% stake in First Executive Corp. after abandoning an effort to force the restructuring of the troubled Los Angeles-based life insurance firm. The sale left Rosewood with a staggering loss.

Rosewood, which has led a group holding 8.5 million shares of First Executive, sold its stake Friday for 14 cents per share, according to a filing with the Securities and Exchange Commission.

The group paid $77.3 million for its initial 6.2-million-share position in First Executive during 1988. Shortly after Rosewood began increasing its stake in First Executive, the stock shot up from a trading range around $11 per share to $15 per share.

The possible withdrawal of Rosewood from a First Executive restructuring was first disclosed Oct. 23, when the group said it was re-evaluating its investment.

First Executive shares closed Monday at 40.6 cents per share, up 3.1 cents. The stock has plummeted from its high for the year of $9.875.

First Executive’s fortunes have sagged under the weight of its enormous investment in junk bonds, which at one point made up about 45% of the insurance company’s invested assets.

Earlier this month, the New Jersey Insurance Department demanded that First Executive post a $500-million deposit for the right to continue selling insurance in the state. The demand came days after First Executive said it would have to reschedule payments on some of its debt and was halting dividend payments on $1.1 billion of preferred stock.

But insurance regulators in California and other states said First Executive’s insurance units remain sound.

Rosewood, part of a holding company set up under a trust that benefits Dallas oil heiress Caroline Rose Hunt, has been sharply critical of longtime Chairman Fred Carr’s management of First Executive.

Rosewood last January proposed an acquisition of First Executive on the condition that Carr resign, but the proposal was rejected by First Executive’s board. Rosewood had also attempted to acquire a 20% stake in First Executive held by ICH Corp., the Louisville, Ky., insurer that is First Executive’s largest shareholder.