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Are they covered?

As you know, the long-awaited federal lawsuits against directors of First Federal Savings of Arkansas and Savers Federal Savings and Loan Association of Little Rock finally hit.

Lawyers representing the Resolution Trust Corp. are attempting to collect more than $240 million in damages against 23 officers, directors and consultants of the two defunct thrifts.

Are the feds interested in tapping the S&L's insurance carrier?

Yes.

And no.

Officials at First Federal had liability coverage with the CNA Insurance Cos. of Chicago.

But officials at Savers had no such policy.

That distinction is clear. The feds are seeking $191 million from the First Federal crew.

CNA likely will be drawn into the fray in the coming weeks.

"At this point, we believe there's a possibility for a substantial recovery," says Jane Jankowski, a spokeswoman with the RTC in Kansas City.

Monetary damages could come out of the defendants' pockets.

That is what happened last year at Landmark Savings Bank of Hot Springs, which had no liability coverage. The feds collected $270,000 from four executives in a $9.6 million suit.

The stakes are much higher with First Federal and Savers.
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Title Annotation:Resolution Trust Corp.'s case against First Federal Savings of Arkansas and Savers Federal Savings and Loan Association
Publication:Arkansas Business
Article Type:Brief Article
Date:Feb 17, 1992
Words:191
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