American Continental Corporation
Encyclopedia
American Continental Corporation was a Phoenix, Arizona
-based real estate
company of the 1970s and 1980s.
It was created in 1978 as a spin-off of American Financial Group
, meant to do residential home construction
. Its chairman was Charles Keating
, who moved to Phoenix to run it.
By 1981, Keating had two thousand employees on his payroll and was one of the largest land developers in Arizona, benefiting from a home building boom in the state.
In February 1984, American Continental Corporation acquired the underperforming Lincoln Savings and Loan Association
for $51 million. Much of American Continental's assets were in the form of Arizona real estate
, junk bonds, and mortgage-backed securities. Lincoln Savings expanded into aggressive, risky land development deals and financial arrangements, including loans due to American Continental. For most of 1987, American Continental was profitable, but by 1988, losses mounted, due to financial troubles and other bad happenings at Lincoln Savings. By 1989, Lincoln made up 90 percent of American Continental's assets.
On April 13, 1989, American Continental Corporation filed for Chapter 11 bankruptcy
. The loss of investors' life savings in Lincoln became one of the key events of the 1980s Savings and loan crisis
and the core of the Keating Five
political scandal.
An 1,800+ linear feet collection of archival records from the American Continental Corporation is available at the Arizona State University Libraries, Department of Archives and Special Collections and consists of correspondence files, architectural and land use plans, promotional and advertisting materials, environmental impact reports, regulatory reports, trial records, attorneys records and financial records relating to the corporation and a number of its subsidiaries. The records extend from approximately 1971 to 1993. Access to certain parts of this collection are limited by court order.
Phoenix, Arizona
Phoenix is the capital, and largest city, of the U.S. state of Arizona, as well as the sixth most populated city in the United States. Phoenix is home to 1,445,632 people according to the official 2010 U.S. Census Bureau data...
-based real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
company of the 1970s and 1980s.
It was created in 1978 as a spin-off of American Financial Group
American Financial Group
American Financial Group Incorporated is a holding company based in Cincinnati, Ohio whose primary business is insurance and investments. American Financial Group's purpose is to enable businesses and individuals to manage risk using insurance products and services tailored to meet their specific...
, meant to do residential home construction
Home construction
Home construction is the process of constructing a home. Beginning with simple pre-historic shelters, home construction techniques have evolved to produce the vast multitude of living accommodations available today. Different levels of wealth and power have warranted various sizes, luxuries, and...
. Its chairman was Charles Keating
Charles Keating
Charles Humphrey Keating Jr. is an American athlete, lawyer, real estate developer, banker, and financier, most known for his role in the savings and loan scandal of the late 1980s....
, who moved to Phoenix to run it.
By 1981, Keating had two thousand employees on his payroll and was one of the largest land developers in Arizona, benefiting from a home building boom in the state.
In February 1984, American Continental Corporation acquired the underperforming Lincoln Savings and Loan Association
Lincoln Savings and Loan Association
The Lincoln Savings and Loan Association of Irvine, California was the financial institution at the heart of the Keating Five scandal during the 1980s Savings and Loan crisis....
for $51 million. Much of American Continental's assets were in the form of Arizona real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
, junk bonds, and mortgage-backed securities. Lincoln Savings expanded into aggressive, risky land development deals and financial arrangements, including loans due to American Continental. For most of 1987, American Continental was profitable, but by 1988, losses mounted, due to financial troubles and other bad happenings at Lincoln Savings. By 1989, Lincoln made up 90 percent of American Continental's assets.
On April 13, 1989, American Continental Corporation filed for Chapter 11 bankruptcy
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
. The loss of investors' life savings in Lincoln became one of the key events of the 1980s Savings and loan crisis
Savings and Loan crisis
The savings and loan crisis of the 1980s and 1990s was the failure of about 747 out of the 3,234 savings and loan associations in the United States...
and the core of the Keating Five
Keating Five
The Keating Five were five United States Senators accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s. The five senators – Alan Cranston , Dennis DeConcini, John Glenn , John McCain , and Donald W. Riegle,...
political scandal.
An 1,800+ linear feet collection of archival records from the American Continental Corporation is available at the Arizona State University Libraries, Department of Archives and Special Collections and consists of correspondence files, architectural and land use plans, promotional and advertisting materials, environmental impact reports, regulatory reports, trial records, attorneys records and financial records relating to the corporation and a number of its subsidiaries. The records extend from approximately 1971 to 1993. Access to certain parts of this collection are limited by court order.