Financial Markets and Institutions:

RTC PLS Restructuring

GGD-93-5R: Published: Nov 18, 1992. Publicly Released: Nov 18, 1992.

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GAO reviewed the impact of the Resolution Trust Corporation's (RTC) restructuring and downsizing of its Professional Liability Section (PLS), focusing on the: (1) number of savings and loan cases in which the statute of limitations expired due to staff reductions; (2) projected number of cases which will expire before RTC restores its staff levels; and (3) potential amount of money that RTC could have recouped if cases were sucessfully tried. GAO noted that: (1) the statute of limitations expired for 18 savings and loan claims; (2) RTC filed claims totalling $1.135 billion against 8 of the 18 institutions for which the statute of limitations expired; (3) RTC operated with approximately half of the required professional liability attorneys; (4) 80 institutions have statutes of limitations that will expire at the end of 1992; (5) RTC must make filing decisions for 390 cases by the end of 1994; (6) it was not possible to calculate the amount that RTC could have recouped if cases had been sucessfully tried; and (7) reasons for not filing claims include particular actions not meeting legal or evidence standards and claims that are not cost-effective.

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