That savings and loan crisis. It just won't go away.

Seven years after the collapse of United Savings Association of Texas, regulators have unleashed a full-scale legal assault to get back some of the $1.6 billion lost in the Houston thrift's failure.

It is the last of the big 1980s S&L cases, one that stirs up a lot of long-forgotten hornet's nests - among them the Federal Home Loan Bank Board's Southwest plan and Drexel Burnham Lambert's junk bonds.

The chief target of the lawsuits, however, is no forgotten figure of the 1980s. Defendant Charles Hurwitz is chairman, chief executive, and controlling shareholder of Maxxam Inc., a Houston aluminum, lumber, and real estate concern with annual revenues of more than $2 billion.

Regulators charge that Mr. Hurwitz was the controlling shareholder of United Savings' holding company, and thus responsible for the thrift's demise. Mr. Hurwitz's lawyers respond that he never controlled United Savings, and that the now-defunct Federal Savings and Loan Insurance Corp. cheated Maxxam by not selling United Savings to the company outright after the thrift failed in 1988.

Also facing charges are Maxxam and another corporation through which Mr. Hurwitz owned a chunk of United Savings, plus five of the thrift's former directors and officers, among them the current chancellor of California's state university system.

It's clear why the case is worth pursuing for the Federal Deposit Insurance Corp., which in August sued Mr. Hurwitz for $250 million, and the Office of Thrift Supervision, which last month hit Mr. Hurwitz, his corporations, and his compatriots with charges that, if proved, could cost them upward of $100 million. Unlike some people sued in the wake of the 1980s thrift collapse, these defendants clearly do have the money.

But that money can also pay for a lot of lawyers. And Mr. Hurwitz, who gained notoriety in the 1980s as a no-holds-barred corporate raider, is legendary for his litigiousness.

"He's going to fight like hell," said one lawyer close to the case. "They (the FDIC and OTS) are going to have their hands full."

Mr. Hurwitz and Maxxam Inc. fired back last month with a claim that FSLIC acted improperly by rejecting Maxxam's bid and handing over the remnants of United Savings to mortgage-backed-securities pioneer Lewis Ranieri in 1988.

Whatever the legal merits of this argument, the regulators' strategy has its own problems. After years of investigating, what they have dug up about Mr. Hurwitz is not exactly, well, sensational.

"This was not the kind of case that was brought in the early years in which there was really wrongdoing," said Mr. Hurwitz's lawyer, Richard Keeton, a partner in the Houston firm of Mayor, Day, Caldwell & Keeton. "Most of the theories they started with, self-dealing, etc., they couldn't find one bit of support for."

Instead, while the OTS charges do include accusations of improper bonus payments to executives and illegal buying of junk bonds from an "affiliated party" (Drexel Burnham Lambert), the heart of both agencies' cases is that United Savings made a lot of risky business decisions that went bad - and that Mr. Hurwitz was responsible for those decisions.

What gives them a hook to sue for bad decision making is a net-worth- maintenance pact that executives of United Financial Group, United Savings' holding company, made with regulators in 1983. To get permission to merge United Savings with Houston First American Savings Association of Texas, they agreed to "as necessary ... infuse additional equity capital" to meet regulatory standards.

This legal argument was convincing enough to get the directors of now- bankrupt United Financial to settle with the OTS and FDIC Dec. 13. They agreed to give regulators $9.45 million of the holding company's remaining $12 million in assets - if a bankruptcy judge allows.

But Mr. Hurwitz denies the FDIC suit's contention that he "dominated and controlled United Savings Association of Texas." And even if he did control the thrift, his lawyers say, he certainly never promised to keep its capital levels up.

Mr. Hurwitz, a former Bache & Co. stockbroker whose 1970s takeovers included Summit Insurance Co. of New York and McCullough Oil Co. of Los Angeles (the company that brought the London Bridge to Arizona), began buying into United Financial Group soon after it was spun off in 1981 by Kenab Services Inc., an oil pipeline company that had bought the thrift in 1979.

By late 1983, Hurwitz-controlled MCO Holdings (the former McCullough Oil) and Federated Development Co. had built up a 22.3% stake - paid for, regulators say, with help from Drexel Burnham, junk bond king Michael Milken's firm.

During those years, high interest rates stung United like virtually every other thrift in the country. Its management at first followed a conservative path, selling branches to raise capital and avoiding risks.

But Mr. Hurwitz pushed for a more aggressive strategy, and by the end of 1985 he and his allies had gained the upper hand. United Savings began to emphasize brokered deposits, big real estate projects, and investments in junk bonds and mortgage-backed securities.

Meanwhile, in 1983, MCO Holdings and Federated Development had asked the Federal Home Loan Bank Board for permission to formally take control of United Financial by increasing their stake to more than 25%. The bank board would give its approval only if the companies agreed to stick to United Financial's net worth maintenance agreement. Mr. Hurwitz never consented, and approval never came.

The regulators contend, however, that Drexel Burnham Lambert's junk bond department held another 10% of United Financial's stock on Mr. Hurwitz's behalf, effectively giving him a nearly 35% stake and responsibility to meet the thrift's net worth obligations.

In any case, United Savings followed its new business strategy right into the ground. By mid-1988, United's mortgage security portfolio had sustained huge losses and the thrift was clearly insolvent. The Federal Home Loan Bank Board began looking for a buyer, eventually adding United to its "Southwest Plan." By the end of the year it came down to Maxxam, which had taken over MCO Holdings' share of United Financial, and a group led by Mr. Ranieri, who had popularized mortgage-backed securities while a trader at Salomon Brothers.

A Resolution Trust Corp. report uncovered in November by Maxxam's lawyers reveals that, on the surface, Maxxam's bid would have cost the thrift deposit insurance fund less than Mr. Ranieri's. But New York University economics professor Lawrence White, who as a member of the Home Loan Bank Board voted to accept Mr. Ranieri's bid, said letting Maxxam have the thrift didn't make sense.

"If you had a group that had run a savings and loan into the ground, you did not want to reward such behavior by then offering FSLIC make-good money to allow these same individuals to retain control," he said.

Mr. Ranieri took over United Savings and built it into a $12 billion- asset institution under the name Bank United of Texas. Mr. Hurwitz and Maxxam, meanwhile, went on to acquire most of Kaiser Aluminum, start a racetrack in Houston, and buy $130 million in troubled real estate assets from the RTC.

The FDIC's investigation, conducted chiefly by outside law firms, has been going on since United Savings failed, and first came to light when Maxxam revealed in 1991 that it had agreed to an extension of the statute of limitations in the case.

Along the way, environmental groups pushed the government to accept Maxxam redwood holdings in Northern California's spotted owl country as part of a settlement - a plan that went nowhere - and in 1994 the OTS, which usually devotes its investigative resources to thrifts that haven't yet failed, joined in on the United Savings hunt.

The hunt is now over. The legal fight, however, has a long way to go.

The FDIC lawsuit, filed in federal court in Houston, won't go to trial before August. The OTS defendants - Mr. Hurwitz, Maxxam, Federated Development, Maxxam executive Ronald Huebsch, California state university system chancellor Barry A. Munitz, Houston developer Jenard M. Gross, Houston lawyer Arthur S. Berner, and Michael Crow, former chief finance officer for United Savings - officially have until Monday to respond to the charges and request administrative hearings, but an extension may be granted.

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