By some accounts, 1997 will finally be the year of big thrift sales in California. But a lingering legacy of the thrift debacle threatens to gum up the works.

Some of the state's most desirable targets, including the nation's largest thrift, H.F. Ahmanson & Co.'s Home Savings of America, Irwindale, are tied up in complex lawsuits against the federal government that date from the thrift crisis.

Though potentially lucrative, the so-called goodwill suits raise sticky price and accounting issues.

The problem has arisen in Seattle-based Washington Mutual Inc.'s negotiations to buy $8.7 billion-asset Coast Savings Bank, Los Angeles. And some say the suits, combined with the overly rich stock prices of takeover targets, will frustrate most dealmakers this year.

Among the takeover skeptics is Edward G. Harshfield, chief executive of the former California Federal Bank, who sold the $14 billion-asset thrift to First Nationwide Bank for $1.2 billion in a deal closed in January.

"You've got Coast, Home, and Glendale (Federal Bank), all with goodwill lawsuits," said Mr. Harshfield, now vice chairman of the merged institution that bears the CalFed name. "It strikes me that the probabilities of further acquisitions (this year) are 80-20 against."

After last July's favorable Supreme Court decision on three of the roughly 125 goodwill cases, buyers and sellers in California would rather just wait for the suits to be settled, Mr. Harshfield said. Some suits may be resolved as early as this year.

The lawsuits were filed to force the federal government to pay up for a 1989 decision by Congress to outlaw favorable accounting treatment previously allowed to healthy thrifts to encourage their takeovers of troubled thrifts.

The lawsuits complicate agreement on a takeover price because it's impossible to know how much any given thrift will eventually win in its suit or when it will be paid and because the potential winnings inflate the target's current stock price.

"What you're really buying is a combination of a lottery ticket and an operating franchise," said an investment banker familiar with such deals. "It's hard to know if you're overpaying for the franchise as a result of things that ought to be attributed to nonrecurring events."

Moreover, attempts to segregate the future winnings, such as California Federal's spinoff of potential winnings into separate securities, imperil the use of "pooling of interests" deal accounting. That method, favored by most financial institutions, lets the buyer simply merge the two balance sheets into one and eliminates the need to amortize the premium over book value against future earnings.

Well-placed sources said that both Washington Mutual and Coast Federal are working on these knotty issues in their talks. Coast, which is believed to have one of the strongest cases against the government, could win a bundle for the $300 million capital credit it was forced to take off its books early in the '90s. It is said to want to spin off the winnings into a security modeled on CalFed's in order to facilitate a merger.

One market source said Washington Mutual chief executive Kerry Killinger has "moved toward being willing to work on purchase transactions."

That would involve buying Coast for cash or new stock and then writing down the premium against Washington Mutual's future earnings. But it would not conflict with a spinoff of any award from the lawsuit.

The mergers of NationsBank Corp. with Boatmen's Bancshares and of First Interstate Bancorp with Wells Fargo & Co. each used purchase accounting.

But the investment banker familiar with such deals said that purchase deals are still too much of an unknown quantity, making such a resolution less likely.

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