Lincoln Savings Investors Hear Encouraging Word
For some of the people who kept their life savings with the failed Lincoln Savings & Loan, the meeting at Walter Reed Junior High School in North Hollywood on Saturday provided a rare glimmer of hope.
Thousands of bondholders lost more than $250 million when the Irvine-based thrift closed. About 300 of those investors showed up for a midday rally to share their stories and hear about efforts under way to get their money back.
At times the gathering was reminiscent of the fervor of a religious service. The group rose to sing an angry rendition of what they call the “Ballad of the Bondholders,” to the tune of “The Battle Hymn of the Republic.” A donation basket was passed to help fund the Lincoln Bondholders Support Group, which called this meeting and has organized others around Los Angeles and mounted public demonstrations.
Federal regulators seized Lincoln more than two years ago after its parent company, American Continental Corp. of Phoenix, filed for bankruptcy. In the aftermath, owner Charles H. Keating Jr. and numerous thrift executives became targets of federal, state and county prosecutors who claim that they made false and misleading statements about risky bonds sold to Lincoln customers.
Those customers and a federal agency have filed several dozen lawsuits against the savings and loan. But two years have brought a tangle of legal proceedings and a dearth of results.
“These meetings help our morale,” said Leonard Mack, 71, who drove up from Long Beach. “We feel like someone cares.”
Mack and others listened as attorney Joseph W. Cotchett, who is representing investors in one of the civil suits, explained that half a dozen development and law firms involved with Lincoln have already agreed to pay $63 million in settlements. That money, Cotchett said, will be distributed to bondholders within the next couple of months.
Cotchett said that the average bondholder lost $15,000 and half of the investors were over age 60.
“I trusted them with all our life savings,” said Evelyn Roum, 61, who along with her sister had invested $121,000 in American Continental bonds. “We were cheated.”
Also speaking before the group were Lt. Gov. Leo McCarthy and former Gov. Jerry Brown. McCarthy urged the bondholders to keep their hopes up while Brown praised them for holding meetings and demonstrating outside recent Keating legal hearings.
“What you are doing is rare,” Brown said. “You being here is a statement that democracy is alive and there is some power in the citizenry.”
The support group is making plans to attend Keating’s local securities fraud trial, which is set to begin Aug. 2 in Los Angeles County Superior Court.
“This group gives me some hope,” said Paul Fasman, 73, of Sherman Oaks. “This is a concerted effort.”
