AMERICAN SAVINGS SUES MILKEN AND OTHERS
AMERICAN SAVINGS SUES MILKEN AND OTHERS MIAMI, Nov. 15 /PRNewswire/ -- American Savings of Florida,
F.S.B. (NASDAQ: ASLA) filed suit in the United States District Court for the Southern District of Florida against Michael Milken, Lowell Milken and numerous other persons and entities related to the Milkens and/or to Drexel Burnham Lambert Incorporated. The suit alleges, among other things, that the defendants, through the use of false and misleading statements concerning the nature, value, risks and liquidity of junk bonds and through control and manipulation of the junk bond market, corruptly obtained influence and control over American Savings, The Enstar Group, Inc. (American Savings' parent, which, collectively with its affiliates, is referred to herein as "Enstar") and their affiliates and used the control to cause these entities to make investments in junk bonds that were unsuitable and/or overpriced. The suit asserts that these actions violated federal and state securities, antitrust and federal racketeering (RICO) laws and constituted common law fraud, breach of fiduciary duty, unfair competition and violations of other statutory and common law rules.
In the action, American Savings seeks, among other things, compensatory, consequential, punitive, rescissionary and treble damages and costs of the suit, including attorneys' fees. Damages before trebling are estimated to be an amount in excess of $370 million. A jury trial has been demanded. Certain of the claims asserted as part of the suit were assigned to American Savings by Enstar as part of the ongoing restructuring of the commercial relationships between Enstar and American Savings. The assignment agreement provides that any amounts payable by the defendants as a result of a final judgment or settlement of the action, after deduction and reimbursement of costs and expenses paid by American Savings and Enstar, and after deduction of contingent fees (including attorneys' fees), will be allocated 20 percent to American Savings and 80 percent to Enstar. On May 31, 1991, Enstar filed in the U.S. Bankruptcy Court for the Middle District of Alabama for protection under Chapter 11 of the federal Bankruptcy Code. Enstar's share of any proceeds from the suit will be distributed to its creditors, including American Savings, pursuant to Enstar's plan of reorganization. Enstar has submitted a plan of reorganization to the Bankruptcy Court. The plan has not been approved and creditors' objections to the plan are pending. The assignment of Enstar's claims to American Savings was approved by the Office of Thrift Supervision, subject to certain conditions, and by the Bankruptcy Court, subject to receipt of written objections from creditors and a hearing thereon. American Savings is represented jointly by Duker & Barrett, New York; Davis, Markel & Edwards, New York; and Anderson, Moss, Parks, Meyers & Sherouse, P.A., Miami. American Savings of Florida, F.S.B., with $3.4 billion in assets, operates a network of 34 retail offices in Dade, Broward and Palm Beach counties. American Savings common stock is traded in the NASDAQ over-the-counter market under the symbol ASLA. -0- 11/15/91 /CONTACT: Alan B. Goldstein, executive vice president and general counsel, of American Savings of Florida, F.S.B., 305-770-2093/ (ASLA) CO: American Savings of Florida, F.S.B. ST: Florida IN: FIN SU: SS-MR -- FL003 -- 1407 11/15/91 09:36 EST
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|Date:||Nov 15, 1991|
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