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U.S. COURT OF APPEALS GRANTS GLENDALE FEDERAL BANK PETITION

 GLENDALE, Calif., Aug. 18 /PRNewswire/ -- In an order released today, the United States Court of Appeals for the Federal Circuit granted Glendale Federal Bank's petition, filed in June 1993, for rehearing in banc of a May 25, 1993, order reversing a lower court's decision in favor of Glendale Federal.
 In May 1993, a panel of three judges voted 2-to-1 to reverse a July 1992 ruling by the U.S. Court of Federal Claims, which held that the government was liable to Glendale Federal for breach of contract in a supervisory goodwill lawsuit.
 Stephen J. Trafton, chairman and chief executive officer of Glendale Federal Bank, said, "Naturally we are pleased with this procedural decision, but it is important to keep in mind that the eventual resolution of the goodwill litigation will very likely take several more years. The bank remains subject to a regulatory directive to complete the recapitalization of the bank in the next few weeks. We cannot allow the possibility that this opinion might enhance the prospects of a recovery in the litigation to deter us from completing the proposed recapitalization transactions in which we are presently engaged. We fully intend to press forward with the recapitalization transactions in order to ensure the survival of the bank so that it will be able to continue its vigorous prosecution of its claims against the government."
 Glendale Federal Bank's goodwill lawsuit against the government stems from a 1981 merger with an ailing Florida thrift, as part of which the government agreed to treat the resulting goodwill as regulatory capital. However, financial legislation passed in 1989 caused the government to breach the agreement with Glendale Federal Bank.
 The July 1992 ruling of the U.S. Court of Federal Claims concerns the liability phase of the litigation only.
 -0- 8/18/93
 /CONTACT: Judy Cunnningham, 818-500-2274, or Jeff Misakian, 818-500-2824, both of Glendale Federal Bank/


CO: Glendale Federal Bank ST: California IN: FIN SU:

BP-LS -- LA021 -- 4114 08/18/93 18:10 EDT
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Publication:PR Newswire
Date:Aug 18, 1993
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