Consolidated Savings Owner Sues for Control : Ferrante Takes Action to Remove Conservator

LOS ANGELES —  Irvine developer and savings and loan owner Robert A. Ferrante has launched a battle to regain control of Consolidated Savings Bank, which federal regulators seized last month.

Ferrante filed suit against the Federal Home Loan Bank Board in federal court Friday, seeking to overturn the conservatorship imposed by the bank board on May 22.

Also named in the suit are the Federal Savings and Loan Insurance Corp. and the state Department of Savings and Loan. In addition to removing the conservator, Ferrante’s suit seeks reimbursement of all costs, an unspecified damage award and reinstatement of all former Consolidated officers and directors.

The suit was filed in response to a lawsuit filed by the bank board against Ferrante and Consolidated’s board of directors on May 23. The bank board alleges that Ferrante and the savings bank’s officers and directors made questionable loans to their own family members and to companies and development projects in which they were personally involved.

Ferrante, 36, a real estate developer who owns all of Consolidated’s stock, founded the bank with $2 million two years ago. At the time of its seizure, it had $84.3 million in assets. Ferrante was not available for comment late Friday.

His suit alleges that the bank board’s actions have “caused great and irreparable harm to Consolidated and Ferrante.” It also alleges that the bank board engaged in a “systematic strangulation of the bank’s operation” and that it was the regulators’ actions rather than the S&L;’s that caused Consolidated to run into financial difficulties.

Ferrante says in the suit that Consolidated submitted, “in good faith,” plans to remedy various problems disclosed after a review of its operations by a supervisory agent for the bank board. The suit alleges that Consolidated “diligently sought approval of the supervisory agent” for changes in one real estate deal but that she failed to respond for several weeks and then threatened to take enforcement action when she disagreed with the action the S&L; took on its own.

Bank board officials were not available for comment late Friday.

Consolidated grew rapidly, primarily by soliciting and paying high rates of interest on jumbo certificates of deposit, according to bank board documents.

Consolidated is currently being managed under a contract with Household Bank of Newport Beach.