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COURT OVERTURNS DECISION ALLOWING CARTERET SAVINGS BANK TO INCLUDE GOODWILL IN REGULATORY CAPITAL

 COURT OVERTURNS DECISION ALLOWING CARTERET SAVINGS BANK
 TO INCLUDE GOODWILL IN REGULATORY CAPITAL
 WASHINGTON, May 11 /PRNewswire/ -- A federal appeals court has overturned a lower court decision that temporarily allowed Carteret Savings Bank, FA, Morristown, N.J., to include goodwill in regulatory capital.
 The May 7 decision by the Third U.S. Circuit Court of Appeals, Philadelphia, reversed a preliminary injunction issued against the Office of Thrift Supervision (OTS) in 1991 by New Jersey District Court Judge John W. Bissell. The injunction prohibited OTS from taking regulatory action against Carteret by excluding goodwill from capital. It also permitted Carteret to claim $50 million in goodwill that it already had written off. The injunction was issued in response to a lawsuit Carteret filed against OTS in February 1991.
 The appeals court said the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) "must be interpreted to supersede Carteret's agreements with earlier regulatory agencies." The ruling frees OTS from legal restrictions while the overall lawsuit is being heard in the lower court. It is the fourth consecutive appellate court decision upholding OTS' treatment of goodwill under FIRREA, which eliminated goodwill from the calculation of regulatory capital.
 -0- 5/11/92
 /CONTACT: Marc Adams of the Office of Thrift Supervision, 202-906-6677/ CO: Office of Thrift Supervision; Carteret Savings Bank, FA ST: New Jersey IN: FIN SU:


MH -- DC028 -- 8778 05/11/92 16:24 EDT
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Publication:PR Newswire
Date:May 11, 1992
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