The Man Behind The Mess At First Capital

The swift decline of California insurer First Capital Holdings Corp. to the brink of bankruptcy has created a throng of losers. Stockholders, notably Shearson Lehman Brothers Inc., which owned a 28% stake and has taken a $144 million pretax writeoff, face a total wipeout. Bondholders and lenders, notably Citibank, on the line for much of a $275 million loan, may not do much better. Policyholders, say regulators, are likely to recoup most if not all of their money but may have to wait awhile.

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