3.        What was the condition of the thrift industry in 1982?

Interest rates were over 15% at a time when the thrift industry was invested in long-term mortgages charging about 8%.  The entire industry was on the verge of bankruptcy, as was the FDIC, the government agency that insured the thrifts to protect the depositors.

4.        What was the government’s response to this crisis?

It encouraged healthy thrifts to acquire failing thrifts with various government incentives, including treating the minus net worth of the failing thrift as the capital asset of goodwill and writing it off over a long period of time.  This program was known as Supervisory Goodwill Agreements.

5.        What is this suit?

As part of this government program, Benj. Franklin in 1982, by agreement with the government, acquired a failing thrift, Equitable Savings and Loan in return for a 40-year amortization of the supervisory goodwill.  Benj. and the government made a similar agreement in 1985 concerning the acquisition of Western Heritage Savings and Loan.  These agreements had the full approval of the Federal Home Loan Bank Board.

6.        Was this 40-year agreement necessary?

7.        What happened to Benj. Franklin between 1982 and 1989?

It prospered, expanded, made a profit in 16 consecutive calendar quarters and became the number one mortgage lender in the Portland metropolitan area and had strong lending positions in other major areas of the northwest.

8.        What happened to the thrift industry in 1989?

Some thrifts, especially in the southwestern United States, defrauded investors and depositors.  Congress responded by passing a law in 1989 called FIRREA, which among other provisions, retroactively revoked agreements for the long-term amortization of goodwill.  With the goodwill removed, Benj. Franklin was instantaneously declared insolvent and was seized by the government on February 21, 1990.

9.        How does the lawsuit stand?

Suing the government is expensive and lengthy.  Over 4,000 shareholders have contributed to the funding of the suit, most at a fair share of 25 cents per share.  In 1995, Chief Judge Smith ruled that these shareholders had the right to bring this suit (“shareholder standing”).  In 1996, the U.S. Supreme Court ruled in a companion case that the government had breached its contract for long term amortization of goodwill.  In 1997, the Judge decided that the government breached its contract with Benj. (granting “summary judgment on liability”).  Trial on the issue of how much damages should be awarded started on January 11, 1999, and with frequent intervals, finished on September 17, 1999.  Our experts testified that the value of Benj. at the time of trial if it had not been seized would have been $944,000,000.  Government experts testified that the damages to Benj. due to the seizure was zero!  We do not know when the case will be decided, but hope it will be soon.

10.        How have we been keeping the shareholders informed?

Over the ten-year period, we have written eleven up-dating reports to those shareholders whose names we have in our records.  Benj. has not had a transfer agent for many years.  We believe our extensive but incomplete list of shareholders is the only accurate one in existence.  The accuracy of our list, in our opinion, is assured by way of funding contributions of $.25 per share, by many who agree and support our cause.

Of the 7,705,000 that were issued, well over 2,000,000 shares are missing.  Could this be you?  We invite you to join with us to expand and further insure the accuracy of ownership list, as well as promptness in locating you, if we win.  Send all checks in the amount of $.25 per share to: