Southmark Files Suit Against Milken
DALLAS - Southmark Corp., a bankrupt real estate development company that formerly owned a major Texas savings and loan, has filed a $200 million lawsuit against Michael Milken and several of his former associates at Drexel Burnham Lambert Inc.
Southmark said the defendants drove it to seek protection from creditors under Chapter 11 of the Bankruptcy Code and saddled the company with "a crushing burden of public debt."
The company filed for bankruptcy protection in July 1989 and is now in liquidation, paying creditors 10 cents on every $1 of debt. It held on to its thrift, $3 billion-asset San Jacinto Savings of Houston, until the latter was seized by the Office of Thrift Supervision in November 1990.