Texas Thrift Placed in Receivership

DALLAS — In an unprecedented action, thrift regulators Thursday placed the insolvent Murray Savings & Loan Assn. into receivership, essentially wiping out the institution’s stockholders and subordinated debt holders.

Murray Savings, the sixth-largest Texas thrift, was taken into the federal oversight program’s conservatorship on April 6. It had $1.4 billion in assets, $1.5 billion in liabilities and $35 million in negative regulatory capital at the end of last year, said the Federal Home Loan Bank Board, which regulates the thrift industry.

In Thursday’s action, all of Murray’s deposits of more than $1 billion, offices and substantially all assets and certain liabilities were transferred to a newly chartered federal mutual institution, Murray Federal Savings & Loan Assn.

The swift action was designed to preempt the threat of Murray’s subordinated debt holders taking the institution to a bankruptcy court in retaliation for the institution’s failure to honor its interest payment on its debt. A bankruptcy action would have frozen the institution’s assets, which in turn would have increased the regulators’ cost to recapitalize the institution.

The Bank Board in a prepared statement said its action would conserve the thrift’s assets and minimize the eventual cost to the Federal Savings and Loan Insurance Corp.