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FDIC ORDERED TO PAY MAXXAM $72 MILLION DALLAS — Calling the Federal Deposit Insurance Corp. “more of a cosa nostra than res publica,” U.S. District Judge Lynn Hughes of Houston issued a ruling Tuesday ordering the FDIC to pay Houston-based Maxxam Inc. more than $72 million in sanctions for legal and other expenses in a 10-year legal battle with the agency. The FDIC claimed that Houston businessman Charles Hurwitz and the two companies he controls, Maxxam Inc. and Federated Development Inc., were not entitled to sanctions. But in a 131-page Opinion on Sanctions, Hughes ruled that Hurwitz and the companies should recover their defense costs in Federal Deposit Insurance v. Hurwitz. “They will recover their costs because the record reveals corrupt individuals within a corrupt agency with corrupt influences on it, bringing this litigation,” Hughes wrote. “This is the final stage in a suit that should have never happened.” In a brief written statement issued on Tuesday, Maxxam officials said, “We consider this decision a complete vindication of Charles Hurwitz and Maxxam Inc. and a condemnation of the actions undertaken by the FDIC and the Office of Thrift Supervision.” In 2002, Hurwitz, Maxxam and Federated Development reached a settlement with the OTS in a related administrative action filed over the failure of United Savings Association of Texas in 1988. The settlement of that long-running enforcement action allowed Hurwitz to aggressively seek the sanctions against the FDIC. � Texas Lawyer

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