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U.S. COURT OF FEDERAL CLAIMS GRANTS GLENDALE FEDERAL BANK'S REQUEST TO OBTAIN OTS DEPOSITIONS IN GOODWILL CASE

 GLENDALE, Calif., May 13 /PRNewswire/ -- Rejecting the arguments of government lawyers, the U.S. Court of Federal Claims has granted Glendale Federal Bank's request that the court order depositions of Office of Thrift Supervision (OTS) personnel in proceedings related to the bank's supervisory goodwill lawsuit against the government.
 The ruling came at a status conference held May 11, 1993, in Washington D.C. Glendale Federal had asked the court to allow the bank to take depositions of OTS personnel in an attempt to resolve or narrow Glendale Federal's damages claim against the government.
 Although government counsel conceded, "I think it did hurt them (Glendale) when they lost the supervisory goodwill," the government argued that the court should do nothing. But Jerry Stouck, a lawyer for Glendale Federal, told the court that "to call a halt to the process would be a terrible mistake ... and would not be consistent with the fair administration of justice."
 The court's order allowing Glendale Federal to take depositions of OTS personnel assures that the process of addressing Glendale Federal's damages claims will continue to move forward. In granting the depositions, the court stated, "at this point I need some more factual information, and the parties, I think, should have the opportunity ... to present some more factual information, that indeed the process can go forward easily."
 Joe Hollingsworth, lead attorney for Glendale Federal Bank, said, "We view the order for depositions to be taken of OTS personnel as an admonition to the government and an opportunity to achieve progress in a case that is important for Glendale Federal, as well as the government."
 Stephen J. Trafton, chairman and chief executive officer of Glendale Federal Bank, commented, "The bank's situation presents a classic civics lesson illustrating the potential for inadvertent mischief in our multibranch system of government. First, the Congress defined away Glendale Federal's contractually guaranteed capital base. Next, the OTS, our primary regulatory agency, ordered us either to restore that capital or face possible seizure. Now, the Justice Department lawyers, notwithstanding their responsibilities as `officers of the court,' make the disingenuous and irresponsible argument that Glendale Federal has suffered no damage. The stakes are high, and it is time for government lawyers to stop their obstructionist, delaying tactics. We believe that the government can play a very constructive role. By working cooperatively toward a settlement of the case, the government and Glendale Federal should be able to reach a resolution which would both compensate the bank for the damages it has so obviously incurred and ensure the long-term viability of the institution. We continue to urge the government to seriously consider a settlement rather than turning a blind eye to both justice and common sense."
 The case involves Glendale Federal Bank's claim that the government breached a 1981 contract pursuant to which Glendale Federal took over a failing Florida thrift, thereby saving the government more than $780 million in resolution costs, and in return the government guaranteed Glendale Federal the right to include supervisory goodwill in its capital base. In July 1992, the Court of Federal Claims granted summary judgment as to liability in Glendale Federal's favor, holding that the government did breach an express contractual commitment regarding goodwill and therefore is liable to Glendale Federal for damages or restitution. The government has appealed that decision. Pending the outcome of the appeal, Glendale Federal has been pressing forward with its claim for $1.4 billion in breach of contract damages.
 Glendale Federal Bank, the primary subsidiary of GLENFED Inc. (NYSE: GLN), is the nation's fifth-largest savings bank. It provides community banking services through 215 banking offices in California, Florida and Washington state.
 -0- 5/13/93
 /CONTACT: Judy Cunningham, 818-500-2274, or Jeff Misakian, 818-500-2824, both of Glendale Federal Bank/
 (GLN)


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

JL -- LA016 -- 7945 05/13/93 09:02 EDT
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Date:May 13, 1993
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