Popejoy to Become a Bass Partner, Quit American S&L; Post

William J. Popejoy plans to leave his job as chief executive of American Savings & Loan and go into business with billionaire Robert M. Bass, The Times has learned.

Bass is the publicity-shy private investor from Texas who plans to buy insolvent American Savings before year-end. Popejoy, 50, has run the behemoth financial institution since August, 1984.

To find a replacement for Popejoy, Bass has been combing the executive ranks of some of California’s best-known financial institutions. It is believed that he is close to a decision, but his spokesmen declined to make any public comment, as did Popejoy.

“They’re looking at the top levels, and they’re willing to pay for it,” said a senior executive at one of Southern California’s largest savings and loans who asked not to be identified.

Popejoy is expected to become what is known as a “principal” in the Bass organization, a loosely organized group of acquisitive investors who are close friends of Bass and guard his privacy like a faithful palace guard. Bass runs his empire from the 31st floor of an office building in downtown Ft. Worth.

Expected to Remain a Director

Bass is thought to be looking for a well-respected, non-controversial executive from a large, profitable financial institution in California. He is said to want American to be a well-managed company free from the continual publicity that dogged Popejoy and caused so much widespread nervousness among American Savings’ depositors.

The search for Popejoy’s successor is being conducted by David M. de Wilde, a senior vice president of Boyden International, an executive search firm in San Francisco. De Wilde could not be reached for comment.

Popejoy is expected to remain a director of American Savings, but it was not clear if he will have an ownership interest in the financial institution as part of his partnership with Bass. Bass had wanted Popejoy to stay as chief executive, but Popejoy declined, in part because he is reported to feel burned out after nearly 4 1/2 turbulent years in the job.

Bass is expected to close the American Savings sale in the week before New Year’s Eve. Federal regulators have agreed to provide $2 billion in assistance to complete the sale, while Bass and his investors have agreed to pump in $550 million in new capital, raised in part through the sale of high-yield “junk bonds.”

Controversial Executive

Once a popular and admired figure in California’s inner thrift circles, Popejoy took the reins of Stockton-based American Savings after regulators had ousted Charles W. Knapp as head of the company.

Popejoy was remarkably successful at first, heading off a huge deposit run and restoring the firm to modest levels of profitability. But his tenure grew increasingly stormy as time wore on, and his rescue attempt eventually failed under the growing weight of repeated deposit runs and massive losses on Knapp-era real estate development loans.

Many shareholders, regulators and fellow executives in the industry eventually grew disenchanted with Popejoy, charging that his business strategies were controversial and unsound. American Savings eventually ran out of capital and was effectively nationalized last September.

Popejoy had his admirers, though, including a loyal headquarters staff and the Bass crowd, which was impressed at how he held the firm together under very trying circumstances without publicly losing his cool.

Rich and Super Rich

Bass and Popejoy first met in Ft. Worth more than a year ago, when Bass expressed an interest in buying American Savings’ problem loans. Although from very different backgrounds, they found initial common ground in the fact that both had married their high school girlfriends. Their rapport developed from there.

Their partnership will be an alliance between the merely rich and the super rich. Although raised in modest surroundings, Popejoy is a self-made multimillionaire and now lives in Newport Beach. Bass inherited millions of dollars but has, through lucrative corporate investments and acquisitions, turned that into a fortune worth well in excess of $1 billion.