List of Investigators of Lincoln Grows; Bankruptcy Judge Appoints Examiner : BANKING / FINANCE

So many people are investigating the failure of Lincoln Savings & Loan in Irvine and the bankruptcy of its parent, Phoenix-based American Continental Corp., that somebody could earn a buck simply by peddling a directory of who’s who.

The latest to join the pack is an examiner in the bankruptcy case. U.S. Bankruptcy Court Judge Sarah Sharer Curley in Phoenix found sufficient evidence of corporate mismanagement last Friday to warrant the appointment of attorney Stanley Bernstein as examiner.

The motion to appoint an examiner came from American Continental securities holders, including some of the 22,000 people who bought nearly $200 million in corporate debt securities.

They wanted an examiner appointed because they did not believe that the unsecured creditors committee has been adequately investigating American Continental, said Andrew S. Friedman, one of the lawyers for the debt holders. American Continental filed its bankruptcy petition on April 13, and regulators seized Lincoln the next day.

Donald Gaffney, the creditors committee attorney, disputed the debt holders’ claim.

“We have had accountants at work since the date of their appointment,” he said.

Gaffney repeated an American Continental charge that the securities holders want an examiner so they can use the bankruptcy process to gain information they would otherwise have to pay to get through the discovery process in their civil litigation. The debt holders have filed a number of lawsuits in Orange and Los Angeles counties and in Phoenix.