10 Federal Suits in Thrift Case Sent to Phoenix : Courts: Legal action by bondholders in Lincoln Savings’ parent firm are consolidated under one judge. Orange County cases aren’t affected.

The 10 federal lawsuits filed by bondholders who lost their investments with the collapse of Lincoln Savings & Loan’s parent firm are being transferred from U.S. District Court in Los Angeles to Phoenix.

A court order by a U.S. administrative panel consolidates the cases before Judge Richard M. Bilby, who has been overseeing the government’s civil racketeering case against former Lincoln operators as well as the bankruptcy of the S&L;’s former parent, Phoenix-based American Continental Corp.

Consolidating the cases before Bilby for all pretrial purposes is necessary “to avoid duplication of discovery, prevent inconsistent pretrial rulings” and conserve resources, according to the order issued Friday from the seven-member Judicial Panel on MultiDistrict Litigation.

Moving the cases to Arizona made sense, the panel said, because American Continental is headquartered there, many defendants and witnesses are located there and a document depository holding more than 20 million pages of material has been set up.

Nearly 22,000 small investors purchased almost $200 million in American Continental bonds at Lincoln’s 29 Southern California branches. The bonds became worthless after the company filed for bankruptcy last April 13. Federal regulators seized Lincoln the following day, and the S&L; is expected to become one of the nation’s costliest failures, with a taxpayer bill of $2 billion.

The bondholders filed 10 lawsuits in federal court and seven actions in Orange County Superior Court. Their lawyers have been divided over the issue of where the federal litigation should be consolidated. The Orange County cases are not affected by the panel’s order.

Joseph W. Cotchett Jr. of Burlingame and Ronald Rus of Orange had argued before the panel to keep the federal bondholder cases before U.S. District Judge Stephen V. Wilson in Los Angeles. They also have taken the lead in the state court cases in Orange County.

“I think it’s a tragedy for the investors,” Cotchett said. “Many of them are old and disabled, and all this is going to do is build in further delay. It appears the investors’ only recourse now is the Superior Court, where they can invoke state statutes to get to trial quicker.”

Other bondholder lawyers took a softer approach.

“The only reason we fought about it was because we didn’t want to lose our trial date of Aug. 13,” said Kevin P. Roddy of Los Angeles, another bondholder lawyer. “We didn’t want wheels of justice slowing down.”

The request to move the cases to Phoenix came from David B. Gold of San Francisco, who filed a suit on behalf of bondholders last fall. He said Bilby was a logical choice to hear the cases because he already is familiar with the issues and has handled other massive, complex litigation, including bondholder litigation over the failure of the Washington Public Power & Supply System.

Most defense lawyers favor the move.

“It’s good because it will put pressure on people to settle the issues,” said James J. Feder of Los Angeles, a lawyer for American Continental. “It’s also good to get this litigation in one place so lawyers can’t play one judge off another.”

Feder said he expects other related litigation, including the state Department of Corporations suit against three American Continental officers, to be transferred to Bilby also.

In another legal matter involving Lincoln, accountant Jack D. Atchison invoked his Fifth Amendment privilege against self-incrimination and refused to testify on behalf of American Continental in a hearing challenging the regulatory takeover of Lincoln.

Atchison was an Arthur Young & Co. accounting partner who was the chief auditor of Lincoln and American Continental in 1987 and 1988. He was later hired by American Continental for more than $900,000 a year.

American Continental’s chairman, Charles H. Keating Jr., wasn’t hesitant to testify before the federal court in Washington, however. He testified, as he has before, that government regulators, not he or his executives, ruined Lincoln.

“I ran a perfectly legitimate savings and loan,” he said. “It’s hogwash to say otherwise.