Judge Rules in Favor of Maxxam

A U.S. administrative law judge has ruled against bank regulators in a long-running lawsuit seeking hundreds of millions of dollars from Houston’s Maxxam Corp. and its chairman, financier Charles Hurwitz, over the 1988 failure of a Texas savings and loan.

In a decision issued late Wednesday, Judge Arthur Shipe recommended the case be dismissed and the Office of Thrift Supervision receive none of the nearly $826 million it had been seeking in connection with the disputed $1.6-billion collapse of the United Savings Assn. of Texas.

The OTS would not comment on the ruling, saying the matter was still in the administrative process. The agency’s director must now decide whether to accept the judge’s recommendation.