American Savings announces potential Milken recovery

Business Wire, Nov 14, 1994

MIAMI--(BUSINESS WIRE)--Nov. 14, 1994--American Savings of Florida, F.S.B. (NASDAQ/NMS:ASFL) announced today that the Milken Global Settlement Fund Schedule 8 Steering Committee has completed its evaluation of the claims American Savings has been pursuing on behalf of the thrift and its holding company, The Enstar Group, Inc., against Michael Milken and certain of his affiliates.

The evaluation is subject to court approval. The evaluation as currently contemplated could result in a pretax recovery of between $6.8 million and $8.1 million to American Savings, subject to certain contingencies discussed below.

The Schedule 8 Steering Committee was established to review and evaluate all of the approximately 78 Schedule 8 claims, including those of American Savings and Enstar. Schedule 8 claims will be paid from a fund of approximately $250 million, consisting of monies obtained from Michael Milken, certain of his affiliates and the Securities and Exchange Commission Fund. In excess of $200 million of this amount has been collected to date and the balance is scheduled to be paid into the fund by the end of 1995.

Certain of the claims pursued by American Savings were assigned to American Savings in 1991 by Enstar under an agreement which provides for an allocation of net proceeds received from the Milken parties (after deduction of required payments to third parties, including attorneys) of eighty percent to Enstar and twenty percent to American Savings.

The amount to be received by Enstar will be eligible for distribution pursuant to Enstar's Second Amended Plan of Reorganization as Modified. Pursuant to the Plan, a part of Enstar's proceeds may be paid into expense and tax reserves and the balance would be available for distribution to creditors, including American Savings, in settlement of a portion of their claims. Under the Plan, two-thirds of Enstar's distribution would be made to American Savings and one-third to other creditors. Enstar has informed American Savings that it intends to provide a tax reserve and an expense reserve prior to distribution.

The timing of any payment or payments is conditioned upon final court approval and is therefore uncertain. In addition, there can be no assurance that all monies will be paid as anticipated or that the remaining unliquidated claims will receive evaluations as projected. Assuming that all monies are paid into the fund as scheduled and that those Schedule 8 claims which remain to be evaluated receive evaluations within current projections, and further assuming that Enstar withholds tax and expense reserves as contemplated by the Plan, American Savings would receive pretax net proceeds in a range of between $6.8 million and $8.1 million, including distributions from Enstar of between $3.4 million and $4.3 million.

American Savings, with approximately $3.5 billion in assets, operates a network of 30 retail offices in Dade, Broward and Palm Beach counties and has eight mortgage origination offices in Florida and two in Illinois. American Savings is a member of the Federal Home Loan Bank System and its deposits are federally insured.

CONTACT: American Savings, Miami

Carlos Fernandez-Guzman, 305/770-2430