How to Play the Big Savings and Loan Lawsuit

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Non-Tech
How to Play the Big Savings and Loan Lawsuit

An SI Board Since June 1996

Posts	SubjectMarks	Bans
63	0	0

Emcee: Robespierre	Type: Unmoderated

Introduction Compact

The US Supreme Court will probably decide this month on a case which will have a profound impact upon the Savings and Loan industry in general and the stock prices of certain issues in particular. The details of the case are rather unimportant - it is essentially a breach of contract dispute between the Federal Government and a number of S&Ls that were brought to the brink of bankruptcy because of the government's actions. Legal observers expect S&Ls to win big. See the recent issue of Fortune (with the BMW on the cover). The case is being fought by Glendale Federal Bank on behalf of a number of other institutions.

How to Play:

#1 In my opinion, the biggest bang for the buck is in CalFed Goodwill Certs (CALGZ). This is a pure play on the lawsuit. CalFed will pay out 25% of the proceeds of the suit to holders of CALGZ. CALGZ is currently at about $9.75 having increased in the past month in anticipation of a positive verdict. Look for CALGZ to trade in the mid-twenties if Glendale wins. Naturally, in the unlikely event that Glendale loses, CALGZ goes to zero.

#2 Another option is to buy Glendale (GLN) or CalFed (CAL) themselves. They might experience a 20-30% increase. However, since it is most likely that the Supreme Court will decide the case this month, I would consider JUN or JUL options on either GLN or CAL. But my favourite play is still CALGZ. The risk with the options is if the court doesn't decide the case by summer reccess.

I would love to hear from anyone else involved in this play. I have held CALGZ since March and an anxiously awaiting the ruling.

Go to reply# or date (mm/dd/yy):

Reply	Message Preview	From	Recs	Posted
63	Wall Street Journal April 12, 1999 Judge Orders U.S. to Pay $908.9 Million To	Richard A. Green	-	4/12/1999
62	Wall St Journal - decision by Judge Smith due Friday Apr 9th on Glendale Federa	Richard A. Green	-	4/8/1999
61	Happy New Year!! Has anyone heard anything yet about end of 1998 court decision	Richard A. Green	-	1/7/1999
60	Rami Have you heard anything recently on the U.S. Court of Claims ruling that	Jim Deni	-	6/18/1997
59	So... why does CALGL warrants trade at somewhat of a premium over CALGZ warrant	Red River	-	3/6/1997
58	No, it went to holders of CAL. CALGZ holders got nothing. And I think the ticke	Robespierre	-	2/10/1997
57	Will people who bought CALGZ on the open market recieve the new CALHZ share on	Red River	-	2/10/1997
56	I've got a big list I'm researching of mostly obscure securities that t	Stephen Lange Ranzini	-	1/27/1997
55	Good stuff! What other goodwill stocks are you interest in? I know about the De	Robespierre	-	1/25/1997
54	The reason why CALGZ and CALGL have risen so sharply since late December is tha	Stephen Lange Ranzini	-	1/25/1997
53	Perhaps share holders in the bank which bought CalFed are now interested in the	Charles Holewinski	-	1/23/1997
52	To my knowledge, both CALGZ and CALGL are after taxes and I believe certain leg	Robespierre	-	1/21/1997
51	Do the CALGZ certificates represent 25% of the proceeds after pro forma taxes a	Jim Sanders	-	1/20/1997
50	California Federal Bank Assigns a Fair Market Value to Secondary Participation	Robespierre	-	1/20/1997
49	The two issues are CALGL and CALGZ. I think they listed under CALGL rather than	Robespierre	-	1/20/1997
48	Hi Rami, There must be some info out there but I can't find out anything.	Charles Holewinski	-	1/20/1997
47	I have no idea why its going up. But I like it.	Robespierre	-	1/19/1997
46	Rami, Do you know the reason for the recent upward movement in CALGZ and CALHZ	Charles Holewinski	-	1/18/1997
45	Cal Fed Bancorp Inc. Stockholders Approve Merger with First Nationwide LOS AN	Robespierre	-	1/8/1997
44	What are the conditions of this new security CALHZ? Will it be another partici	Charles Holewinski	-	1/8/1997
43	The takeover of CAL won't affect CALGZ holders. CAL holders will simply be	Robespierre	-	1/7/1997
42	Rami, I discovered this thread several months ago and was surprised to see it.	Charles Holewinski	-	1/1/1997
41	This is great news and greatly increases the chances that the companies will re	Robespierre	-	12/19/1996
40	Latest info I have on lawsuit, GlenFed says judge denies 2 government motions G	Jim Lovejoy	-	12/19/1996
39	First, to get to this board, do a search for "savings and loan" becau	Robespierre	-	10/3/1996

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