HomeFed Hires Outside Auditor, Adds Director
Embattled HomeFed Bank announced Tuesday that it has hired a new outside auditor and added a board director.
The auditing firm Arthur Andersen & Co. replaces KMPG Peat Marwick. HomeFed chief executive Thomas Wageman decided that hiring a new auditing firm would “bring a fresh look to things,” a HomeFed spokeswoman said Tuesday.
KMPG Peat Marwick was reelected as auditor at HomeFed’s annual shareholders meeting in May over the protests of some stockholders, who questioned the action in light of HomeFed’s deepening financial problems.
HomeFed has lost $530 million over 18 months and is short of two of three regulatory capital requirements. Facing the growing prospect of a government takeover, the S&L; hired Wageman, a specialist in managing troubled thrifts, as chief executive last month after federal regulators forced his successor, Robert Adelizzi, to resign in May.
The new HomeFed director is David Dunn, head of an investment partnership called Idanta Partners of La Jolla that last year acquired HomeFed stock and convertible bonds representing a 7.2% share of the total fully diluted shares outstanding. Dunn fills a newly created board director position.
Dunn and his partnership have absorbed huge losses on their investment, for which they paid $11.3 million. Idanta acquired most of its shares at prices of $4.54 to $6.675 each, but HomeFed shares closed Tuesday at $2, down $.25 in New York Stock Exchange trading.
Idanta’s investment made it the S&L;’s third-largest shareholder, after Wellington Management Co. and Windsor Funds, investments firms that each hold 9.7% of HomeFed stock.
Idanta has since reduced its HomeFed holdings to stock and bonds that represent slightly more than 6% of total HomeFed shares outstanding.
