In a final order Thursday, a federal judge overseeing the nearly 19-year-old legal fight over the improper 1992 seizure of PSFS by the Federal Deposit Insurance Corp. ordered the federal government to turn over $276 million for distribution to shareholders and to cover expenses.
"The long battle by the shareholders, led by former director Frank Slattery, is finally over, and the shareholders will be finally provided a small measure of justice and relief. Justice delayed, but not denied," said Tom Buchanan, Slattery's attorney, at Winston & Strawn L.L.P.
Buchanan said shares in the defunct bank, which changed its name to Meritor Financial Group after going public in 1983, were worth an estimated $4.50 each under the damages award. Payments should start early next year, he said.
Senior Judge Loren A. Smith of the U.S. Court of Federal Claims in Washington approved a $24 million contingency fee for Buchanan and his law firm, citing the complexity of the case, the serious risk of losing and not getting paid at all, and the case's "unusual duration."
An additional $8.3 million in expenses were approved.
Not all of the remaining $244 million will go to shareholders. The judge ordered $7.6 million into an escrow account to cover a potential claim by another former director who argued that the awards should go to shareholders at the time of the seizure, whether they still own their shares or not.
The FDIC now must establish procedures to distribute the money to shareholders. The agency did not provide that information Thursday. In all, it is estimated there are 3,000 shareholders.