Mr. Scott acknowleged yesterday that "it's difficult to arrange financing for an acquisition of any savings and loan now," with so much attention focused on the federal government's plans to bail out ailing thrifts. But he said his group had commitments for 75% to 80% of the $55 million it needed to raise, and that "within another week we should have it all." He declined to identify the sources of the funding or say exactly how much money had been committed. Mr. Scott said he's "not unhappy" that the offer expired, "because we want to renegotiate some of the terms of the transaction." He wouldn't be more specific. Mr. Scott, a former chairman of Fidelity Federal Savings & Loan Association and its parent, Citadel Holding Corp., Glendale, Calif., had offered to acquire the common stock of Lincoln in exchange for $288.8 million of new preferred stock that would be non-voting and non-convertible and would pay American Continental a 9% dividend. American Continental also was to have bought back certain real-estate and securities investments from Lincoln for $388 million in 10-year notes, paying 10% interest. A few weeks ago, American Continental tried to dispel rumors that the deal had fallen through by announcing that the closing of the acquisition was "imminent." That announcement' riled the California Department of Savings & Loan. The state agency quickly fired off an announcement saying that "there is no way that the sale can be imminent" because the application for approval submitted to the department by Mr. Scott had "significant, material omissions" and was incomplete. The department gave Mr. Scott 30 days to provide the required information. William Davis, chief deputy commissioner for the department, said yesterday that Mr. Scott's group hasn't yet provided the information, but that Mr. Scott has said he doesn't plan to withdraw his group's application. Mr. Davis declined to comment on the fraud investigation involving Lincoln. Mr. Scott said he was surprised by news of the investigation. "There's nothing in the due diligence review that even suggests there's anything like this going on," he said. END OF DOCUMENT United States Senate SPECIAL COUNSEL! EX. 520 6-14-89 MEMORANDUM To: Bot Maynes I think some time the best defeese is en Wenced to answer Wall estreet Journal. our answer mest: 1, Discredet Gray 2. Five samples of the help we give constete tax both this that extribets to my Campaign = chres 3. Reason we Lo#2. A. Right thing to do - D 001852 21 United States Senate MEMORANDUM Jobs, loans, toys paist etc. This is not going to blow away so we need to be aggressis, Pls work to peet this together. Two examples attached the piece will help our supporters defend us also Letersit right away. TO: SENATOR DeCONCINI FROM: Laurie Sedlmayr LAS RE: Federal Home Loan Bank Board/Limitations on Direct Investments Since your conversation with Bob Kielty of Continental, I have spoken with the Arizona Savings and Loan League and the U.S. League about the limitation on direct investment" issue. Both the Arizona League and the U.S. League take a much more moderate position on this issue. They agree with the FHLBB that there should be some restriction on direct investment and are looking either for a 30% limitation or a 10/10/5 limitation. The state of Arizona currently has a 10/10/5 limitation limiting S&L's to 10% investment in a service company, 10% in real estate and 5% in equity securities. The state of California has deregulated to such an extent that S&L's can have 100% outside investment. do not support such an approach. SPECIAL COUNSEL Per your request, attached is a short summary of Ed Gray's troubles. I wasn't sure what you wanted in terms of format but this is a first shot. If you want changes i can come back in the office and rework this. I should be reachable this afternoon until about 6 pm D.C. time. We will be at the Kennedy Center Saturday night after seven, but don't expect to be home too late. F'll be home most of Sunday other than running errands, we have an answering machine if you want to get a hold of me. Laurie 202/364-8118 (h) 202/224-4014 (o-direct) CC: Bob Magnes SPECIAL COUNSEL |