At long last there's some good news for directors and officers of failed thrifts who have come into the banking agencies' legal spotlight.

Lawyers active in these negligence suits say the Resolution Trust Corp. is bending over backwards to resolve outstanding claims.

"It is easier today to settle a case at RTC than ever," said Ronald Glancz, a partner at Venable, Baetjer, Howard & Civiletti.

Mr. Glancz said several factors are converging to make settlements easier to reach.

First, the RTC may close down at the end of the year, so the agency's lawyers want to clear out their caseloads. "There's nothing in it for them anymore," Mr. Glancz said.

Second, the courts have started ruling against the agencies. Recent decisions have struck down attempts to apply an easier-to-prove form of negligence, and the courts are starting to rein in some of the agency's investigatory practices.

Third, the cases are costing the agencies more to litigate than they can collect. The American Association of Bank Directors estimated in a March report that the RTC is recovering between 86 cents and 45 cents per dollar spent. (The report does note that RTC officials deny the losses and claim they expect to recoup their investment shortly.)

And finally, the other agencies are concerned that these suits are scaring community leaders. "They look bad," Mr. Glancz said. "The FDIC is concerned what these suits are doing for people who are serving on bank boards."

Before an officer or director can settle, however, he needs to get his case to the attention of the agency's Washington-based lawyers. The lawyers in the field are not government employees. Rather, the RTC and the agencies pay them by the hour.

"You want to get it away from the fee counsel because they want to extend it to generate more fees," Mr. Glancz said.

Still, getting the case to Washington isn't always enough to secure a reasonable settlement, the lawyers said. Directors and officers can secure much lower resolutions if they can scare the regulators, several lawyers at the conference agreed.

"Settlements are the product of fear on both sides," said Alan E. Popkin, a partner at Husch & Eppenberger. "So you need to understand your enemy and what makes them fearful."

He said RTC lawyers are scared of only two things - immediate trials and the disclosure of embarrassing materials.

Litigants need to feed off these two fears, he said, by pushing for speedy trials despite pleas from RTC lawyers that they are not prepared. And they must conduct pretrial questioning of agency employees to look for screw-ups.

"You can hurt them by showing that some of the things they've done are absolutely outrageous," he said.

Mr. Popkin said he forced a substantially lower settlement after subjecting an RTC investigator to 10 days of questioning.

"The best way to settle is to beat them up first," Mr. Glancz agreed. "You've got to win a few battles."

Howard Cayne, a partner at Arnold & Porter warned defendants that they must include "bar" orders in their settlements. This legal doctrine effectively prevents other agencies or defendants from dragging you into their case.

And, he said, anyone settling should make sure the Office of Thrift Supervision, which has an extra three years to pursue directors and officers, isn't planning any suits of its own.

Mr. Glancz said officers and directors shouldn't worry if their case isn't resolved before the RTC shuts down.

"If it goes to the FDIC, their staff is underworked," he said. "So they can spend time on your case."

In fact, Mr. Glancz said, the FDIC has shown a particular softness for outside directors.

Despite the good news, any settlement has its costs. The three lawyers said a case that settles before trial can cost several hundred thousand dollars in legal fees. Complex "cradle to grave" cases that actually go to a jury can ring up tabs of $2 million or more.

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