Lawsuits by American Continental Dismissed : Courts: Trustee of bankrupt company had sought to recover thousands of ‘preference payments’ totaling $24.5 million.

A federal judge on Thursday dismissed several thousand lawsuits that the bankrupt parent company of Lincoln Savings & Loan had filed last summer in an effort to collect $24.5 million in so-called preference payments.

The payments, made to creditors during the 90 days preceding a bankruptcy filing, had been sought under routine procedures by the government-appointed trustee of American Continental Corp. in Phoenix.

Most of the money sought by the estate consisted of interest paid on bonds--regardless of whether they matured--and any principal paid on bonds within the 90 days before the company’s April, 1989, bankruptcy filing.

U.S. District Judge Richard M. Bilby, who had held the company’s lawsuits in abeyance since last summer, decided that the payments were made in the ordinary course of business and, therefore, were not subject to confiscation under preference laws.

Besides, he told lawyers, any other decision would result in a situation in which “only the lawyers will get rich, and the system will be disgraced.”

Bilby issued his ruling during a break in the civil fraud and racketeering trial at which small investors are alleging that Charles H. Keating Jr., American Continental’s former chairman, and his professional advisers misled them about the health of the company and its S&L.;

Thousands of investors, most of them Southern Californians who bought the company’s bonds at Lincoln branches, lost $285 million after the company went bankrupt and regulators seized Lincoln. The S&L;’s failure is the nation’s biggest, costing taxpayers $2.6 billion.

“This is a great victory for the bondholders,” said Ronald Rus of Orange, one of the lawyers for small investors.

The ruling eliminates a potential group of plaintiffs--those whose bonds came due and were paid off entirely just before bankruptcy. It also means that larger bondholders who lost money in the company’s collapse won’t have to return the interest they earned in the company’s final days.

Those who did send money to the company are expected to get a refund because Bilby had ordered that money to be held in an escrow account until he made a final ruling.

Ironically, most of the money sought stemmed from Keating’s decision to pay $20 million in principal and interest on the bonds in the company’s final months. Keating had wanted to use the money as his war chest to fight thrift regulators in the impending takeover of Lincoln. But his top executives convinced him that the money was earmarked for bondholders and persuaded him to pay them.