Jerry and Patricia A. Dixon, et al - Page 45




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          Mr. Alexander's testimony regarding the transaction differed from           
          Mr. Kersting's testimony in one material respect.  Specifically,            
          contrary to Mr. Kersting's testimony, Mr. Alexander testified               
          that the Federal Home Loan Bank Board denied Mr. Kersting's                 
          application for Investors Financial to serve as a holding company           
          for First Savings.57  Mr. Alexander further testified that                  
          Mr. Kersting "watered down" the First Savings shares by issuing             
          additional Investors Financial shares to individuals other than             
          the original acquiring group.  Mr. Alexander testified that when            
          he questioned Mr. Kersting about the matter, Mr. Kersting stated            
          that there was no problem with issuing additional Investors                 
          Financial shares because Mr. Kersting could have the shares                 
          returned at any time.                                                       
          Mr. Alexander testified that in February 1980, Federal                      
          banking authorities forced First Savings to merge with First                
          Federal Savings of Honolulu.  Mr. Alexander testified that,                 
          following the forced merger, Mr. Kersting returned the initial              
          investments of some members of the original acquiring group but             
          that Mr. Kersting did not return Mr. Alexander's investment of              
          approximately $125,000.                                                     
               Under direct examination by Mr. McWade, Mr. Alexander                  
          admitted that he had filed a lawsuit against Mr. Kersting, which            
          resulted in the arbitration proceeding in July 1987, and that he            

          57  In Dixon II, the Court found that Investors Financial                   
          was not approved as a holding company for First Savings and that            
          Investors Financial had no other assets.  See Dixon II, 62 T.C.M.           
          (CCH) at 1447, 1991 T.C.M. (RIA), at 91-2987.                               

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