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GLENDALE FEDERAL BANK WELCOMES ORDER ISSUED BY UNITED STATES COURT OF FEDERAL CLAIMS IN PENDING GOODWILL LAWSUIT

 WASHINGTON, Feb. 8 /PRNewswire/ -- Glendale Federal Bank, the primary subsidiary of GLENFED Inc. (NYSE: GLN), said an order, filed Feb. 4, 1993, in the United States Court of Federal Claims, calls upon the U.S. Government to meet with the bank to explore areas of potential agreement on Glendale Federal's damages claim in its pending supervisory goodwill lawsuit or other means to avoid what the court termed "an historic legal irony of unparalleled cost and waste."
 In July 1992 the Court of Federal Claims ruled that the government was liable to Glendale Federal for damages suffered as a result of the government's breach of contract. The government appealed the ruling and an appellate court opinion is expected in the next several months.
 In separate statements, Glendale Federal has urged that the government settle its claims, noting that the public policy dilemma facing the government is a choice between incurring enormous seizure and liquidation costs, while still facing the potential liability of the full claim for recovery of damages, and a settlement with the bank for approximately half of the claim for damages alone, an action that would restore Glendale Federal to full capital compliance.
 The Feb. 4 order states that "At the status conference held Feb. 2, 1993, Glendale Federal presented the court with a unique and serious concern. Glendale alleges that unless the judicial system grants it the relief it believes it is entitled to by June 30, 1993, ... plaintiff could be put into receivership by the Office of Thrift Supervision (OTS) and liquidated by the Resolution Trust Co. (RTC) at a cost of $4-5 billion to the taxpayers. This could occur even if Glendale prevails on its legal claims in the courts. This might well be in addition to the monetary recovery to Glendale or its shareholders which plaintiff estimates to be between $1.4 and $1.9 billion."
 The court noted: "The damage phase of this case also involves novel and complex issues which would likely require an extended trial. Even if such a trial were begun today, a final determination of the case would almost certainly not be issued by the judicial system before June 30, 1993." The court stated that in Glendale Federal's view, this may well be too late for the bank and for taxpayers.
 The court further stated: "Since the plaintiff has prevailed in this court, and the potential damages in this case are clearly enormous, Glendale's view must be taken very seriously. If the plaintiff's view is ultimately held to be correct, the consequence of post-June 30, 1993 legal relief would be an historic legal irony of unparalleled cost and waste."
 Therefore, the court called upon the parties to explore means for reducing "the potential for such massive waste" by considering an agreement to avoid potential receivership until final resolution of Glendale Federal's claims and by simultaneously attempting to arrive at an amount of damages suffered by Glendale Federal. The parties were further ordered to report the outcome of such meetings to the court at a status conference scheduled for Feb. 17, 1993.
 The court further noted that, while it has neither the power to enjoin the government from imposing a receivership nor to order parties to settle either the whole case or even certain issues, "a very real problem exists which may threaten the ability of our legal system to resolve this case rationally and justly. Therefore, the court strongly suggests that the parties and their clients make every effort to insure the resolution of the damages issues by means short of formal litigation and in a timeframe consistent with the requirements of justice."
 Glendale Federal Bank is the nation's fifth-largest savings bank. It provides community banking services through 215 banking offices in California, Florida and Washington.
 -0- 2/8/93
 /CONTACT: Joe G. Hollingsworth of Spriggs & Hollingsworth, 202-898-5800; or Maury Healy of Healy Williams & Co., 415-546-6166, both for GLENFED/
 (GLN)


CO: GLENFED Inc.; Glendale Federal Bank ST: California IN: FIN SU:

JL -- LA008 -- 4085 02/08/93 11:52 EST
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Date:Feb 8, 1993
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