S&L; Liquidator Plans to Expand Southland Office
The West Coast office of the Resolution Trust Corp., which manages and liquidates failed thrifts in California, expects to increase its staff 66% to 600 employees within a year, federal officials said Wednesday.
The fast-growing federal agency opened the Costa Mesa facility only a year ago and now has 361 employees who manage, market and sell loans, real estate and other assets from 74 failed California savings and loans. The West Coast office handles 21% of the RTC’s holdings nationwide.
The office, designed to consolidate under one roof the disposal of bad assets from failed West Coast thrifts, is expanding so fast that it will move to new quarters in a Koll Co. high-rise in Newport Beach by the end of the year, said J. Michael Berry, office director.
He revealed the growth plans at the first of what the RTC expects to be a semiannual review of the agency’s national and local achievements and future goals. The Costa Mesa office is responsible for failed thrifts in California, Hawaii and Guam, but only California has had failed thrifts under RTC control.
“We are different from any federal agency you have ever heard of or seen,” Berry said. “We want to sell assets, dispose of all properties, reach zero and go out of business.”
The 1989 federal law that created the agency also set the end of 1996 as the deadline for the agency to cease operation. Neither Berry nor his boss, Sherwin Koopmans, director of the RTC’s Western region in Denver, would say if the agency would need more time.
Nationally, Koopmans said, about 75% of all thrifts that are expected to fail by August, 1992, already have been turned over to the RTC. Any thrifts that fail after that date will be turned over to the Federal Deposit Insurance Corp. for liquidation, he said.
Koopmans and Berry presented an upbeat picture of the often-criticized federal agency.
They acknowledged that the RTC--one of the nation’s biggest real estate owners and bankers, with nearly $167 billion in assets--is under pressure to sell assets faster. They also said the agency is working on reducing the long delays in getting approvals on major transactions.
But, Koopmans said, the RTC had sold or closed 66% of the failed institutions and 47% of their assets by the end of 1990. In raw numbers, that amounts to 363 of 553 S&Ls; and $128.3 billion of $295 billion in assets that have been returned to the private sector, he said.
Berry said the West Coast office, like other consolidated RTC offices, must go through an elaborate process to liquidate assets it receives. It must determine what the assets are, classify and package them and market the packages, often at discounts. Poor record-keeping often distorts the true nature of an asset and is one of the biggest problems regulators face in sorting assets, he said.
In California, the RTC controls nearly $35 billion in assets, and plans to dispose of $16.6 billion of those assets, mainly mortgage loans, by the end of the year, Berry said.
The West Coast office already has moved $505 million worth of loans to private contractors registered to do business with the agency. Deals have been struck to sell an additional $1.1 billion worth of loans and property.
Facing a need to sell more assets and to increase its staff size, the West Coast office must move.
Berry said the agency is now crammed into a stylish Spanish-Colonial building, once the headquarters of the now-defunct Pacific Savings Bank, and it doesn’t own a building big enough to house the staff.
Boxes and file cabinets are stacked in hallways, and large offices are carved up to hold a number of employees.