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Resolution Trust Corporation: Analysis of Selected Asset Sales and Financial Data

GGD-94-37 Published: Feb 01, 1994. Publicly Released: Feb 01, 1994.
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Highlights

GAO reviewed the costs and revenues associated with Resolution Trust Corporation (RTC) assets under standard asset management and disposition agreement (SAMDA) contracts, focusing on: (1) holding costs and revenues; (2) holding times; (3) net recovery rates; and (4) how RTC could use asset information to maximize recoveries.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Resolution Trust Corporation To help RTC manage its assets, the President and Chief Executive Officer, RTC, should use the asset sales and financial data being collected in AMS to analyze holding costs and revenues, holding times, and recovery rates of its assets. RTC should use the results of these analyses as one of many factors to better manage its assets and direct its disposition efforts in order to increase net recoveries.
Closed – Implemented
RTC incorporated the Summary of Recovery Rates for RTC Sales Initiatives, a comparative analysis, into its update of its Business Plan. This analysis included transactions occurring through December 1994, and included a comparison of all the major sales methods used by RTC. The analysis compares pre-sale asset valuation, gross sales price, net sales proceeds, and adjusted net sales proceeds but does not consider holding cost and holding times. RTC's information systems still do not capture this information and because of RTC's approaching sunset, no systems changes are planned to enable RTC to capture and use these data in calculating true net recoveries on the sale of assets. GAO concurs with RTC's position that it is not economically feasible to make further information system changes at this stage in RTC's life, and GAO is therefore closing this recommendation.

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Topics

AssetsBank failuresFederal property managementFinancial management systemsInsured commercial banksManagement information systemsProperty disposalReal estate salesReporting requirementsSavings and loan associations