New details on Commerce Bank sale

George E. Norcross III, a leading Democratic Party figure in South Jersey, got his insurance business back and $7.6 million in special payments from the pending sale of Commerce Bancorp Inc.

Commerce disclosed yesterday in a proxy statement that it received $121 million from the previously reported sale of Commerce Banc Insurance Services Inc. to its founder, Norcross, and partners.

The proxy set Feb. 6 as the date shareholders in the Cherry Hill bank will get to vote on the sale of Commerce to TD Bank Financial Group of Toronto. The vote on the stock and cash deal valued at $7.8 billion, based on TD's current share price, is set for 4 p.m. at Commerce's corporate university in Mount Laurel.

The bank also said it reached a settlement Monday in 10 shareholder lawsuits filed against Commerce Bank founder Vernon W. Hill II and other directors after the sale was announced Oct. 2. The suits generally argued that the buyout price was too low.

Under the settlement, the deal's termination fee - which Commerce would owe to TD Bank if the sale fizzled - will be $255 million instead of $332 million, and the period during which it is payable was reduced to 12 months from 15. The settlement also required additional disclosures and corrections to the preliminary November proxy statement concerning the sale.

The November proxy, for example, listed Norcross, Joseph S. Vassalluzzo and John K. Loyd as members of the special committee of directors exploring the sale of Commerce.

But according to yesterday's proxy, the special committee members were Donald T. DiFrancesco, Loyd, Joseph T. Tarquini Jr., Norcross, and company chairman Joseph Buckelew as a nonvoting member.

In both cases, Norcross was named as chairman, but the earlier proxy went into greater detail about his dual roles as a director of Commerce and potential purchaser of part of the company.

Lawyers for the bank and the shareholders negotiated the settlement over four days last weekend with the help of retired Magistrate Judge Joel Rosen of the United States District Court for the District of New Jersey, the proxy said.

Commerce spokesman David Flaherty had no comment beyond the latest proxy.

The lead plaintiff attorneys, Ira Richards of Trujillo Rodriguez & Richards L.L.C. and Richard D. Greenfield of Greenfield & Goodman L.L.C., did not return calls seeking comment.

The sale of Commerce Banc Insurance, which had $83.53 million in revenue in 2006, did not include personal-insurance lines, software firm eMoney Advisors Inc. in Conshohocken, and an office building in New Jersey.

As of Dec. 7, Norcross owned 2.68 million shares of Commerce stock, including indirect holdings worth nearly $100 million at yesterday's close of $37.08.

In setting the price for the insurance business, "the Commerce board of directors took into account the fact that Mr. Norcross produced, by a wide margin, more revenue for CBIS [Commerce Banc Insurance Services] than any of its other employees," the proxy said.