May 15, 1992

A former Federal prosecutor testified today that his efforts to pursue an investigation against the Bank of Credit and Commerce International were delayed and frustrated by his superiors at the Justice Department, raising further questions about the Government's handling of the case. Dexter Lehtinen, the United States Attorney in Miami until January, said that in 1991 when his office was building a tax case against B.C.C.I., it needed a judge's order to obtain B.C.C.I. documents in about 10 foreign countries. To take that step, attorneys in the field must receive approval from the Justice Department in Washington. "But we never got permission and it was never explained," Mr. Lehtinen said.

International Olympia & York filed for the equivalent of bankruptcy protection in Toronto after three months of negotiations with lenders. The possibility that the company's office towers in Toronto might be seized by bondholders pushed the Reichmanns to seek court protection. [ Page A1. ] The filing is unlikely to cause much further harm in the U.S. property market. [ D6. ] The Reichmann brothers are as legendary as they are mysterious. [ D6. ] Efforts to pursue an investigation against B.C.C.I. were delayed and frustrated by Justice Dept. officials, a former Federal prosecutor testified, raising further questions about the Government's handling of the case. [ D1. ]

At the Digital Equipment Corporation, the financially troubled computer maker, power struggles have long been a way of life. But if the clash involved Kenneth H. Olsen, Digital's founder and president, the outcome was always a foregone conclusion. Last year, John Rose, a 16-year Digital veteran who spent several years leading the company's catch-up efforts in the personal computer market, was stunned to discover that Mr. Olsen had created a competing group that was pursuing a vastly different strategy for the company.

It all began two years ago, when David N. Dinkins, the Mayor of New York and a tennis buff, pressed the Federal Aviation Administration to steer aircraft away from the United States Open tennis tournament in Flushing Meadows-Corona Park so that players could concentrate and fans could hear the whack of gut hitting ball. It has now led to daylong sorties of aircraft thundering over the sprawling contemporary home of Robert and Sandy Weintraub and thousands of their neighbors in this enclave of wealth and privilege beyond the city line.

Olympia & York Developments Ltd., the world's largest real estate development company, whose office towers have altered skylines in New York, London and throughout Canada, filed for the equivalent of bankruptcy protection in a Toronto court last night after three months of negotiations with lenders failed, bankers and other people close to the company said. Olympia & York is the biggest company ever to file for bankruptcy protection in Canada. Analysts and bankers have long expressed a fear that if the company was forced to file for bankruptcy, the world's financial and property markets would be roiled. The entire Olympia & York empire, which is owned by the Reichmann family of Toronto, has debts in excess of $18.5 billion and has been trying to restructure about $12 billion of debt. Could Hurt Banks Office rents, building prices and bank balance sheets in the United States already reflect such a weak property market that Olympia & York's bankruptcy filing is unlikely to cause much further harm, real estate and banking experts said yesterday. In New York, the company's most prominent property is the World Financial Center on the southern tip of Manhattan. But the financial problems could have an impact on some major banks in Europe, Canada and Japan as well as some New York banks, including Citicorp, J. P. Morgan & Company and Chemical Bank. Those American banks have already reserved for potential losses but investors could drive down stock prices. [ Page D6. ]