Milken Brothers and Others Sued By Florida's American Savings
MIAMI - American Savings of Florida said it has filed suit in U.S. District Court for the Southern District of Florida against Michael Milken, Lowell Milken, and "numerous other persons and entities" related to them and to the defunct Drexel Burnham Lambert Inc.
The thrift, the second-largest in Florida, with $3.5 billion in assets, is seeking damages before trebling of more than $370 million.
American alleges that the defendants, through false and misleading statements and through manipulation of the junk bond market, caused the thrift and its parent, Enstar Group Inc., to make investments in junk bonds that were unsuitable, overpriced, or both.
The actions were characterized in the complaint as violations of federal and state securities, antitrust, and racketeering laws.
The company said certain of the claims were assigned to American Savings by Enstar Group as part of a restructuring of the two entities' corporate relationship. After certain deductions, Enstar would get 80% of a final judgment or settlement, and American Savings 20%.
In May, Enstar filed for bankruptcy protection. A reorganization plan has not been approved.