Lincoln Bondholders Face New Problem : Lawsuit: American Continental Corp., the parent of the collapsed S&L;, wants return of $24.5 million in so-called preference payments made to creditors during the 90 days before the bankruptcy.

Several thousand Southern Californians who thought they had escaped with their money just before Lincoln Savings & Loan collapsed two years ago received a nasty surprise in the mail over the weekend: notices that the Irvine thrift’s former owner wants the money back.

American Continental Corp., which is being liquidated in U.S. Bankruptcy Court in Phoenix, has filed nearly 2,100 lawsuits seeking the return of $24.5 million in so-called preference payments, which are amounts paid to creditors during the 90 days preceding a bankruptcy.

The preference payments sought include interest paid on bonds--regardless of whether they matured--and any principle paid on bonds within the three months before the company filed for bankruptcy.

The lawsuits, which had been expected under the liquidation plan approved by a federal judge, have nevertheless outraged bondholders.

“I think that this is one circumstance where . . . a federal statute allows an unfair result,” said Ronald Rus of Orange, a lawyer for thousands of small investors who lost more than $250 million in the collapse of the Irvine thrift.

“Preferences happen all the time, but to allow this further victimization more than two years after the fact is indeed unfortunate,” he said. “It’s certainly not something (American Continental) has to do.”

Of the total amount sought, $22.9 million is principle and interest paid to those who bought American Continental bonds. About 90% of that amount--or $20.6 million--is being sought from investors whose bonds matured in the three months preceding the company’s April 13, 1989, bankruptcy. Lincoln was seized by regulators the next day.

“I don’t understand why I’m at fault,” said Judy Weiss of Oxnard. “It matured and they gave me my money. I don’t understand how they can take it back.”

Weiss said she cannot afford the $6,142.50 that American Continental is seeking. The amount consists of interest paid on a $4,000 bond during the 90-day pre-bankruptcy period, the principle returned to her and interest on a separate $4,000 bond that she and her daughter had. That second bond was lost in the company’s collapse.

“The suits affect a small number of bondholders who already lost money,” said William Rose, an American Continental lawyer.

Those are small investors, mainly elderly people, who lost their money when the company and the thrift failed. The company is seeking the interest that was paid on those bonds before the failure.

Those investors were named on 944 bonds totaling $2.3 million. They were sued because they were mainly larger bondholders--about $33,000 or more per investor--who earned $1,000 or more in interest in the three months before the company’s bankruptcy filing. Court rules don’t allow a bankrupt estate to recover preference payments by mail for less than $1,000 per debt.

“There are a lot of senior citizens out there, and we certainly don’t want to cause people harm,” Rose said. “We don’t know how many of them are retired doctors or lawyers or others with substantial funds. Obviously, if people cannot satisfy a judgment, our chances of recovery are slim to none. We’ll have to make a judgment call that can’t chase them.”

Rose explained that preference payments are unfair because they allow a creditor to collect the full amount of a debt just before the debtor files bankruptcy when those in a similar situation lose their money because the company decides to seek court protection at a particular time.

Bondholders can “settle” the claims against them by forwarding 85% of the money received in the 90-day period, Rose said. Those who refuse to pay could be subjected to a judgment against them, he said. In any event, the liquidation plan estimates that the net recovery for the company would be about $10 million.

Any funds collected will go into American Continental’s estate and be distributed according to the plan. Under that plan, certain investors--mainly those who bought their bonds at Lincoln’s Southern California branches--will not share in the pot of money created.

Their only recourse, said Rose, is to join the civil lawsuits against former American Continental Chairman Charles H. Keating Jr., his aides and the lawyers and accountants who advised him. Rus said there may be other legal remedies, which lawyers for bondholders are reviewing.

The company is no longer under the control of Keating, who quit last August as American Continental’s chairman. His financial empire was crushed under the weight of risky investments of federally insured deposits and heavy debt to bondholders. He has become a nationwide symbol of industry excesses and faces state and federal lawsuits and criminal prosecution.