BANKING / FINANCE : Defendants Hauled to Court in Lincoln Case: 63 People, 33 Firms

Attorneys for bondholders caught in the collapse of Lincoln Savings & Loan are bringing ever more defendants to court to account for their role in advising the Irvine thrift and its Phoenix parent company, American Continental Corp.

They recently filed a sixth amended complaint that adds as defendants five attorneys, two law firms and six other individuals and companies.

Altogether, the complaint now lists 63 individuals and 33 companies as defendants in a lawsuit that seeks more than $250 million for investors in American Continental.

While it seems as if the litigation is still in the preliminary stages, attorneys have already been questioning witnesses under oath and face an April 1 deadline for further questioning, said Ronald Rus of Orange, one of the plaintiffs’ attorneys.

The attorneys have also negotiated settlements with six defendants, bringing $24.3 million to the eventual pool of funds they hope to collect for investors. They will also take their fees out of that pool.

The trial is scheduled for September before U.S. District Judge Richard M. Bilby in Phoenix, who is presiding over all civil litigation and American Continental’s bankruptcy proceedings.

The civil litigation includes the $1.1-billion civil lawsuit alleging racketeering that federal regulators filed against former American Continental Chairman Charles H. Keating Jr. and others. That suit is expected to be amended soon to include as defendants several large accounting firms and law firms.

Federal regulators, meanwhile, joined with the investors’ attorneys last month to sue all of the insurance carriers for American Continental, Lincoln and their subsidiaries. The joint action seeks a court order saying that the insurers are obligated to pay for any damages the plaintiffs win.