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F. The Attempted Sale of Texana Capital
In late 1986, petitioner and other Texana Capital
shareholders tried to sell Texana Capital's Texana stock. The
shareholders held about 93 percent of Texana Capital's shares and
Texana Capital held about 98 percent of Texana's shares. Texana
Capital had no assets other than Texana stock.
In November or December of 1986, Lemons negotiated the sale
of Texana Capital's Texana stock. In February of 1987, Lemons
and petitioner signed agreements to sell the stock. However, the
parties did not make a final agreement, and petitioner never sold
his stock. Petitioner would have made a profit of about $44,000
if the agreement had been completed.
G. Termination of Vernon's Operations and Bankruptcy of
Dondi Financial
1. The Seizure of Vernon
The FHLBB seized Vernon, terminated its operations, and
appointed the FSLIC as receiver on March 20, 1987. Vernon
disavowed all of its obligations to pay its creditors. Vernon
was reconstituted as Vernon Federal Savings Association (VFSA).
VFSA did not issue stock to Dondi Financial to replace Dondi
Financial's holdings in Vernon.
On April 27, 1987, the FSLIC sued seven Vernon officers,
including petitioner, for $350 million.
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