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Non-Tech : How to Play the Big Savings and Loan Lawsuit
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To: Robespierre who wrote ()1/25/1997 1:44:00 AM
From: Stephen Lange Ranzini   of 63
 
The reason why CALGZ and CALGL have risen so sharply since late
December is that on December 20, 1996, the U.S. Court of Claims ruled
that the savings and loans which had FIRREA-based goodwill suits
pending were entitled to lost profits in addition to the amount of the
goodwill lost and the interest on the principal amount of goodwill.
The good news is that this decision increases the potential recovery
ultimately for CALGZ and CALGL. The bad news is that this theory of
damages is 1) unlikely to be upheld at the higher court levels and 2)
will result in a significant delay in reaching a final resolution of
the case as a result of the appeals. This decision shouldn't have
been a surprise to anyone that took the trouble to read the Court of
Claims judge's earlier rulings on this matter, but obviously, most
investors these days don't do basic research. Secondarily, the
listing of CALGL increased the visibility and depth of the market cap
for this type of investment, and also presents some interesting
arbitrage possibilities.

Stephen Lange Ranzini, Co-Manager, Orpheus Capital

P.S. Orpheus Capital is a specialist fund which invests solely in the
securities of companies with FIRREA-based goodwill claims.
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