Westminster Capital to Get $26-Million Settlement
Westminster Capital Inc., a former holding company for the failed FarWest Savings & Loan, said it will receive a $26-million settlement from former junk bond financier Michael Milken and bankrupt investment banking firm Drexel Burnham Lambert Inc.
Westminster Capital, chaired by Canadian millionaire William Belzberg, said it expects to receive $16.8 million of the settlement after court-approved attorney fees of $9.1 million are deducted.
The settlement stems from allegations that failed thrifts such as FarWest, Lincoln Savings & Loan in Irvine and Columbia Savings & Loan in Beverly Hills were bilked out of funds by risky junk-bond trading and illegal manipulation of the junk-bond market.
FarWest bought more than $500 million worth of Milken’s junk bonds in the late 1980s, but the value of its investment shrank by half with the market’s collapse.
Westminster Capital, based in Beverly Hills, also said Monday that as the former holding company for the Newport Beach thrift, it was still being investigated by the Resolution Trust Corp.
The company said the RTC, which liquidates failed thrifts, has requested that Westminster Capital and three of its officers and directors agree to extend the statute of limitations covering the potential claims. The company said it was considering the request.
Regulators took over FarWest in 1991 at an estimated cost to taxpayers of $831 million. Most branches were sold in 1992 to American Savings Bank in Irvine.