BANKING & FINANCE - June 22, 1993

Glenfed Appeals Ruling: Glendale Federal Bank’s parent asked a U.S. appeals court to rehear the court’s decision that effectively put Glenfed closer to government seizure. Glenfed is short of the capital that regulators say it must have by June 30, a shortage Glenfed blames largely on an alleged breach of contract by the government. Glenfed at one time could count as capital the bad loans it assumed from buying failed thrifts, but that capital was erased when Congress rewrote the thrift laws in 1989. A lower court agreed that the changes amounted to a breach of contract, but the appellate court reversed the decision May 26. Glenfed is seeking $1.3 billion in damages in the case.