Newspaper article THE JOURNAL RECORD

Lawton S&l Working under Confidential Orders, Court Told

Newspaper article THE JOURNAL RECORD

Lawton S&l Working under Confidential Orders, Court Told

Article excerpt

Home Savings, a Lawton-based federal savings and loan currently suing Coopers & Lybrand for "sloppy" audits, is under confidential orders from the Federal Savings and Loan Insurance Corp., according to testimony given Tuesday in the second day of the trial.

The orders are "not public information," said James Odom, president and chief executive officer of Home Savings.

The fact that Home Savings is under orders was disclosed as Odom was undergoing cross-examination in U.S. District Court. The lawsuit which centers around allegations that Coopers & Lybrand, a international accounting firm, performed negligent audits on Oklahoma City-based CB Financial Corp.

Those audits cost three savings and loan institutions $8.2 million in actual damages, the thrifts claimed in court documents when CB Financial defaulted on the notes.

Also Tuesday, U.S. District Judge Layn Phillips, who started the trial Monday, struck the punitive damages claim from the Home Savings lawsuit, but he left intact the punitive damage claims of the other two savings and loan associations.

The punitive damages were struck after B.J. Rothbaum, one of the attorneys representing Coopers & Lybrand, requested the deletion, because Home Savings had not proven Coopers & Lybrand's actions showed "willful misconduct or malice" in performing the audits.

Phillips said he would wait to rule on the other punitive claims and give the remaining two financial institutions a chance to present their case-in-chief.

If those institutions rely on the same information and evidence as Home Savings did in its case, Phillips told Rothbaum, "then you might have a pretty good argument" for striking the punitives from those cases as well.

The three suits are combined for trial and punitive damages for all have been set at $11.2 million. The other two institutions suing Coopers & Lybrand are Phoenix Savings and Loan of Muskogee and the Federal Savings and Loan Insurance Corp. …

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