Magazine article American Banker

Affiliated Computer, Loser in RTC Bidding, Cries Foul

Magazine article American Banker

Affiliated Computer, Loser in RTC Bidding, Cries Foul

Article excerpt

Affiliated Computer, Loser in RTC Bidding, Cries Foul

The sale of the largest mortgage company under government control has erupted into a legal brawl, with the runner-up bidder claiming the decks were stacked.

In a lawsuit filed this week in U.S. District Court in Dallas, Affiliated Computer Systems said the Resolution Trust Corp. unfairly favored an investor group led by the senior managers of BancPlus Mortgage Corp., the company that was sold.

An official of the RTC claimed that Affiliated, based in Dallas, did not have the funding in place to back its purchase plan.

The winning bid, backed by Texas billionaires Sid and Lee Bass, was selected in late August. The group is believed to have bid more than $100 million for the servicing operation, BancPlus' primary business. It also is said to be acquiring other assets and assuming debt.

Affiliated, a data-processing concern that wants to enter mortgage banking, is demanding that the deal be stopped. The RTC has agreed to delay the closing pending review next week by the court.

BancPlus Mortgage, a unit of the failed BancPlus Federal Savings Association in San Antonio, services about $10 billion of loans. It ranks as the nation's 24th largest servicer.

|Essential Information' Issue

Affiliated charged in the suit that it was denied "essential information" known to the management team. As the bidding progressed, the suit said, the agency "imposed terms and conditions that increased the management group's inherent advantage."

In an interview this week, Darwin Deason, chairman of Affiliated, accused the RTC of getting by "with playing judge, jury, executioner, and defendant. …

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