Monday, Oct. 01, 1984
Soft Landing for a High Flyer
When Charles Knapp bailed out last month as chairman of struggling Financial Corp. of America, a soft landing seemed likely. Last week it was learned that Knapp, whose high-risk growth strategy for the California-based savings and loan left the thrift holding too many unprofitable fixed-rate loans, had managed to secure a golden parachute from Financial Corp.'s board of directors in the form of a severance payment worth $2 million.
Federal regulators, who have been forced to pump loans worth more than $2 billion into F.C.A. since July to offset withdrawals by jittery depositors, are angry about the parting payment and are said to be pressing F.C.A.'s board to recoup the cash. That, however, will not be easy. Knapp arranged for the $2 million to be deposited in a foreign account. The money is probably beyond the Breach of U.S. authorities and F.C.A. share; holders. While Government regulators back home seek new ways to keep F.C.A. afloat, notably by backing the company's plan to sell $2 billion worth of new certificates of deposit, Knapp last week was reportedly vacationing in Europe. He is unlikely to be short of funds.