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JONES DAY AUTHORIZES SETTLEMENT OF RTC CASES

 CLEVELAND, April 19 /PRNewswire/ -- The international law firm of Jones, Day, Reavis & Pogue has authorized its insurance carrier to conclude settlement of the Resolution Trust Corporation's (RTC) lawsuits and other potential claims against the firm, including its representation of American Continental Corporation and Lincoln Savings & Loan Association. The comprehensive settlement absolves the firm of any existing and future liability to the RTC for problems stemming from the savings and loan bailout.
 The settlement, the bulk of which will be covered by insurance, provides for payment of $51 million to the RTC. The terms of the RTC settlement expressly deny any liability or wrongdoing by Jones Day or any of its lawyers. An administrative order, entered into between the firm and the Office of Thrift Supervision, provides for policies and practices in limited areas of the firm's financial institutions practice. These practices, many of which are already part of the firm's internal procedures, will not affect Jones Day's ability to service financial institutions clients.
 Jones Day Managing Partner Patrick F. McCartan said: ? "The decision to settle all RTC claims, and the Lincoln case in particular was a difficult one because we remain convinced that our limited services to ACC/Lincoln were performed competently and in accord with applicable standards of professional conduct.
 "During the 1980's our firm represented more than one hundred financial institutions, including Lincoln, and served them well. Lincoln, however, was an institution controlled by Charles Keating, once thought to be an innovator in the industry, but now a symbol of everything that went wrong in the industry. Keating's name so infected these proceedings that the outcome of the trial was very hard to predict with any degree of assurance."
 McCartan added, "Neither Jones Day, nor the other respected professional service firms that have been caught up in the aftermath of the Lincoln failure caused the institution's problems. Lincoln's failure resulted from business transactions entered into by Lincoln independently of any advice rendered by Jones Day. The business risks presented by those transactions were known to those who managed Lincoln, and the transactions were carried out under the oversight of federal and state regulators who were charged with monitoring Lincoln's affairs. In fact, many of the damaging transactions occurred during a two-year period when the regulators delayed shutting down the institution.
 "In settling this case, Jones Day reluctantly follows a pattern which is emerging -- unfortunately, but for easily understood business reasons -- in this kind of litigation. In the wake of the collapse of the savings and loan industry, suits such as this have been filed routinely against professionals. Such suits have been just as routinely settled, even if they are, as this one is, without merit.
 "The emergence of this pattern is explained by the choice ultimately presented to the defendant professionals in these cases. The huge damage claims that are typically asserted make it sensible for a defendant to avoid a remote, but nonetheless unacceptable, risk of trial in favor of a predictable settlement.
 "The net result of this settlement pattern, of course, is that the allegations of the suit and the kind of novel theories that are presented will not be tested by trial on the merits. Although this is not desirable, it is invariably the rational choice, if not the just one, given the hard business judgments that must be made by those responsible for the well-being of the professional firm and for its many valued clients, lawyers and employees."
 -0- 4/19/93
 /CONTACT: Terri Mazzotti of Jones Day, Reavis & Pogue, 216-586-7359/


CO: Jones, Day, Reavis & Pogue ST: Ohio IN: SU:

BM -- CL011 -- 7368 04/19/93 12:05 EDT
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Publication:PR Newswire
Date:Apr 19, 1993
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