(ق) SO UPRATE FINANCIAL INFORMATION WOULD BE INCLUDED IN THE DOC REQUIRED ACE TO CHANGE ITS ADVERTISING SEVERAL TIMES ...TO HIGHLIGHT THE FACT THAT THE DEBENTURE WERE NOT PEPERALLY INSURED AND TO ELIMINATE ANY MRICATION THAT ACC'S PEBT WAS DEBT OF LEBL. DEL AUTHORIZED THE LEASE BY. WHICH ACC RENTED SPACE IN LSSL LOCATIONS TO SELL THE DEBENTURES. DOL HAD NO SAY. IN THIS MATTER. 5. WHAT IS THE RELATIONSHIP KIWEN CONSEINS EXLEKA, BY DSL DOS. ENFACEMENT. OF THE LAW? THE LEGISTER MTICLES STATE. THAT DEL OBJECTS). VIGORDUDUT THAT WHAT WERE ESSENTIALLY JUNE HONDS -WERE BEAG SOLD TO TEPOSITORS" AT LSLL LOCATIONS. As None ABONE, DOL AUTHORIZED THE LEAN TRANSACTION PURBHNT TO LInvoy DSL COULD SUCH SALES well MADE. DOC HD NO SAY IN THIS. HAVE REVOKED THIS AUTHORIZATION, BUT DID NOT DO SO, ALTHOUGH ・DSL. ULTIMATELY. REFUSED TO RENEW IT. Batth DAVIS IS QUOTED AS STYING: "IN ANALYSIS YOU COULD SEE .. HOW THEY LAMERICAN CONTINENTAL) WOULD HAVE A DIFFICULT TIME ・LERITING". THIS. MISSES SENTRAL POINTS. FIRST, IT NOTES A POTENTIAL DIFFICULTY OUT. DOES NOT CLAIM THAT PAYMENTS COULD NOT BE MADE. SECOND IT PROVIDES NO ANALYSIS OF CASH FLOW AND CASH AUNLABLE FROM SALES OF PROJECTS. THIS TO THE EXTENT IT ANALYZES ACC MY KNOWLEDGE DSL NEVER REQUIRED CHANGES AND THUS Ace was UNITTESTED, FOURTH, THIS MAY BE WIND SIGHT AND IT DEETHINLY WOULD NOT CARRY THE BURDEN OF PROOF NECESSARY TO DENY A QUIUNCION. FINALLY, THIS CALL AND THE RELATED ANALYSIS WAS. HADE BY DOC, NOT DSL. [NOTESACC) 7/9/89 NOTES ON LINCOLN SAVINGS AND AMERICAN CONTINENTAL 1. Corporations "qualifies by coordination" about 1,000 securities annually, according to Christine Bender. 2. It appears that Corporations "qualified by coordination" $570 million in ACC subordinated debentures from 1985 to 1988; however there is no indication that anything like that amount is or was outstanding at any one time. Some of the newer issues were intended to replace the older, higher interest rate ones. And at least $200 million was qualification for an additional year of an earlier, 60-day qualification whose time had run out. Also: The last ACC "10-Q" report filed with the SEC showed $213, 585,000 in outstanding subordinated debt as of Sept. 30, 1988. The class action plaintiffs allege that "at least $250,000,000" has been lost by 23,000 investors. 3. Although its records are not available, Corporations believes its approval of Lincoln's sublease to ACC to permit ACC to sell its securites in Lincoln offices was effective July 1, 1987. Savings and Loan did not believe it had the authority to block the sales once it sensed they might be misleading, so attempted to police the situation until the lease expired one year later. Also: The lease approval was evidently made at a lower staff level in the department. Sale of uninsured "products" in savings and loan offices is not unusual. - A recent Savings and Loan phone survey found 24 state-charterd savings and loans selling uninsured investments--stock, insurance annuities, mutual funds, bonds, and limited partnerships. Norie, however, appear to involve the debt of a parent corporation. 4. Lincoln/ACC and its attorneys made several appeals to the BT&H Agency, in general asking help to keep "the regulators from over-regulating and more specifically: 1) to deter Crawford from supporting an Ed Gray-sponsored ameridment to federal regulations to limit S&L's direct investment (greatly expanded by deregulation); 2) to encourage Crawford to be more reasonable rather than refuse to permit lease extensions which would have let ACC continue to market its securities in Lincoln offices; 3) to attempt to deter Crawford from making statements which might block the last ditch attempts to sell Lincoln (all of which failed). 5. Tom left Corporations in February of 1987 and his first contact with the department on ACC/Lincoln matters appears to have been in March 1988, 13 months later. The November 3, 1986, subordinated debt qualification was to run for one year, but was evidently interpreted by ACC to have been extended by Corporation's erroneous acceptance of an amendment to it on Nov. 27, 1987. Tom's activites appear to focus on furthering a new application to continue the expired qualification and attempting to get a qualification for longer than 60 days. (On March 29, 1988, Corporations granted a 60-day qualification for $200 million; on May 26, as the 60 days ended Corporations granted a one - 1988 6. Because of the fire and subsequent asbestos problems in the L.A. headquarters of both Corporations and Savings and Loans, historic information is not as available as it would otherwise be and questions are taking longer to answer. A: "Because Danny Wall indicated that he thought Googhegan would be opposed to the Lincoln sale." 2. Q: What transpired during the conversation? A: "I asked John Goeghegan what his position would be on the Lincoln sale. Be indicated he would not have a position because they would have no authority." 3. Q: Did you ask state regulators not to make critical statements about the Lincoln sale while the sale was pending? A: "No." 4. Q: Do you see any conflict of interest in contacting a regulator from another state on behalf of a major campaign contributor? A: "I see no conflict of interest in contacting a regulator from another state on behalf of a company that has a $50 million payroll in my state, over $1 billion in loans and investment and 1500 employees, in spite of the fact that some of the company's executives contributed to my campaign." -30 |