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HomeFed files $5-billion lawsuit

HomeFed Corp. has filed a $5-billion lawsuit accusing government thrift liquidators of breach of contract and mismanagement at the failed HomeFed Bank.

The federal lawsuit filed Thursday in San Diego against the Resolution Trust Corp. also alleges breach of duty in the government's handling of HomeFed Bank.

Federal regulators in July seized HomeFed, the nation's eighth-largest savings and loan with more than $12-billion in assets.

The former holding company for HomeFed Bank filed claims last fall totaling $5.5-billion with the RTC, acting as receiver for the failed thrift.

HomeFed Corp. said the claims were based on estimated losses from the government's sale of HomeFed Bank assets at less than their value.

In the lawsuit, the holding company contends the RTC has not responded to the claims despite a federal law that requires a response within six months.

"I find an arrogance in the RTC's election not to respond to the receivership claims," said president and chief executive Ted Sprink.

RTC officials in Washington were not immediately available for comment Friday.

Other named defendants include the Federal Deposit Insurance Corp., Office of Thrift Supervision, Thrift Depositor Protection Oversight Board and the Treasury Department.

HomeFed's seizure marked the largest S&L failure in U.S. history. Stripped of its biggest subsidiary, HomeFed Corp. filed for bankruptcy protection in October.

HomeFed's claims against the RTC include damages caused when regulators forced HomeFed Bank to deduct from its capital the goodwill from a string of acquisitions HomeFed Bank made in the 1980s.

Good will is essentially an intangible asset _ like the value of a bank's franchise _ that the thrift included in calculating its capital, or money set aside to cushion sudden losses.