Cal Fed parent wins judgment

Wednesday, Aug. 7, 2002 | 11:13 a.m.

WASHINGTON -- A judge ordered the U.S. government to pay Golden State Bancorp Inc., which operates in Las Vegas as California Federal bank, $381 million for breaking a promise of special regulatory treatment made during the savings and loan crisis of the 1980s.

U.S. Claims Court Judge Loren A. Smith, saying he wished he had power to order a larger award, gave the San Francisco-based thrift less than half the $909 million he had awarded in a 1999 ruling. A federal appeals court said that amount was too large and told Smith to recalculate it.

Golden State "will get significantly less than half of the amount that this court feels is the fair amount by which it has been damaged," Smith wrote. "This is not justice. However, it is not the job of a court to legislate on what the law should say."

Golden State's case is one of 100 active suits that center on promises made by regulators to encourage takeovers of failing thrifts. The suits say thrift acquirers spared regulators from having to seize the struggling institutions and pay off depositors, then lost money when the government reneged on the promises.