Lamar Stockholders Accuse Feds of Ignoring Own Proposal
WASHINGTON (AP) _ Stockholders of Lamar Savings Association, merged into an association owned by a member of the wealthy Hunt family of Dallas, accused federal regulators Thursday of ignoring their private recapitalization proposal.
″Texas is a political pie being carved up by those with the big political connections,″ said Laurie Paxson, the president of Signature Communications of Austin and a spokeswoman for the Lamar majority stockholders.
The Federal Home Loan Bank Board on Wednesday merged Lamar of Austin, the 11th largest thrift in Texas, into Southwest Savings Association of Dallas, in what officials said may be the largest thrift restructuring under the so- called Southwest Plan to shore up the crippled industry in Texas.
Ms. Paxson said the Lamar majority stockholders - Stan Adams III and his sisters, Hazel and Naomi Adams, had pulled together a deal to pump $1.6 billion in private capital into the troubled thrift, but that the bank board officials snubbed their plan and wouldn’t meet with them.
She said the Adams siblings, whose father, Stanley E. Adams Jr., bought Lamar 19 years ago and who is majority stockholder of City Savings in San Angelo, had spent considerable money on a Chicago consultant, The Whitehall Group, and an outside auditor to put together the private recapitalization plan.
″We feel it was not even considered. It never got an audience,″ she said.
Stand Adams III said: ″They wouldn’t even take a look at it. They refused to meet with us.″
But bank board spokesman Karl Hoyle said the plan was not ignored. ″It was reviewed,″ he said.
″The Federal Home Loan Bank Board made a business decision as to what was the best way to go. We reviewed all the plans, including theirs. The Federal Home Loan Bank Board made the best business decision in the interest of FSLIC, the surviving institutions and Southwest,″ Hoyle said.
The Caroline Hunt Trust Estate owns 90 percent of Southwest, although Ms. Hunt, the 64-year-old daughter of the late billionaire wildcatter H.L. Hunt, has no active involvement in the association and does not sit on its board of directors, a Southwest official said.
The Southwest official, who spoke on condition of anonymity, said it asked to be part of the Southwest Plan and regulators presented various institutions for acquisition.
″It was not like a kid in a candy store,″ the official said.
The Federal Savings and Loan Insurance Corp. will spend a record $2 billion on the deal, in which City Savings and Loan Association of San Angelo, Stockton Savings Association of Dallas and Briercroft Savings Association of Austin also were merged into Southwest. Their combined assets are now more than $4 billion.
The merger is the second under the bank board’s Southwest Plan to consolidate unhealthy thrifts with healthy institutions. Texas now has 101 insolvent thrifts, down from 109 before the first merger went through last week.
According to the bank board, Lamar committed numerous regulatory violations that included ″reckless and imprudent underwriting and lending practices,″ lending too much to one borrower, and violating conflict of interest and loan documenation rules.
″As a result of these actions, Lamar became insolvent in October 1986 and the institution was put in the Federal Home Loan Bank Board’s management consignment program the same month,″ the bank board said.
As of March 31, the bank board said Lamar had a negative net worth of $331.9 million, with assets of $1.9 million and liabilities of $2.3 billion.
Rep. Henry B. Gonzalez, D-Texas, who has asked the General Accounting Office to investigate the Southwest Plan because of concerns politics would play a part, said he would look into the Lamar situation.