Finance: Making a Pedigreed Lion Out of Three Alley Cats

In the savings-and-loan business, no one rivals Charles A. Wellman of Los Angeles as a surgeon for sick companies. In the past three years, he has substantially cured five firms that were suffering from serious financial maladies. Last spring, Wellman succeeded the ousted Bart Lytton as president and chief executive officer of California's Lytton Financial Corp., a huge but ailing holding company with total assets of $682 million. Now Wellman is involved in conducting his most intricate operation yet, which, if successful, will transform three weak S&Ls into one thriving $1 billion enterprise.

Under a deal devised with the help...