Valley Federal Agrees to $3.5-Million Settlement
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Valley Federal Savings & Loan said it will pay $3.5 million to settle a lawsuit brought against the Van Nuys institution by several other savings and loans.
Sun Savings in San Diego, Guaranty Savings of Arkansas and First Federal Savings in Pennsylvania had formed a consortium with Valley Federal to create a line of credit for a San Francisco real estate loan company, Investment Mortgage International. Valley Federal was the lead lender.
The consortium advanced $17 million to IMI, which then went into bankruptcy. The money was not paid back, and the other savings and loans sued Valley Federal for $13 million in 1984.
Valley Federal said it is still negotiating on how and when it will pay the $3.5-million settlement.
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