Current, former bank leaders trade charges at annual meeting Ex-directors list complaints against Bank of Glen Burnie

March 14, 1997|By Bill Atkinson | Bill Atkinson,SUN STAFF

An annual meeting turned into a free-for-all yesterday as charges and counter charges flew about who is to blame for problems at the Bank of Glen Burnie.

The unusually long meeting -- two hours and 40 minutes -- pitted friend against friend, family against family and current management against former management.

The fight was precipitated when a group of four directors abruptly resigned two weeks ago, arguing that executives were mismanaging the bank. Three families formed the institution 47 years ago. Their children now run it or have large stakes in it.

The former directors and some other shareholders made several complaints:

* The bank's management has been so lax that federal regulators forced them to sign an agreement to improve lending practices.

* The price of the bank's shares has fallen 32 percent, to about $28 a share, making it difficult to sell.

* The bank has lost $2.7 million the past two years, a time when the banking industry is enjoying record profits.

* The bank faces several lawsuits because management allegedly honored forged checks. Another suit seeks $55 million in damages in a case of alleged fraud.

The meeting started out as most annual meetings do -- calm -- when Chairman John E. Demyan introduced the board of directors. Within 15 minutes, though, the fireworks began.

Demyan's first cousin, Susan Demyan, one of the former directors, stood at a podium in a large dining hall at LaFontaine Bleu Catering in Glen Burnie and asked to have the names of four new directors listed on the proxy ballot. They included hers as well as those of two other former directors, and a fourth candidate.

The names were written on a message board after management could find no way to avoid listing the challengers.

Then Susan Demyan made an attempt to tell shareholders why she and the others resigned, but John Demyan drowned her out by talking loudly into the microphone.

"This is a shareholders' meeting," he said. "You can try to shut us out. We are going to hit you with a shareholder suit."

But shareholders wanted to hear her side of the story.

"Let's hear her out," shouted one.

"You get two minutes to tell them what you want to tell them," her cousin finally said.

Susan Demyan complained that the two-minute limit was nothing but an attempt by her cousin to "shut us out."

"Right now you've got 1: 40," John Demyan said.

"What is happening to this bank is you've got complete, lousy management," she said, listing mounting bad loans, rising expenses and audits not being performed.

F. William Kuethe Jr., bank president, defended its record.

He blamed prior managers, who were ousted two years ago in a proxy fight, for most of the bad loans. He said 76 percent of the loans the bank had written off were caused by them.

At that point, Jan Clark, the former bank president who was ousted in 1995, rose from his seat to argue that it was his administration that had in fact identified the bank's problems and worked to clean them up.

"Fortunately, I sold my shares when they were $38 a share," he said, his voice rising.

He said he wasn't going to let Kuethe put the blame on him.

The war of words finally subsided when the shareholders voted. It took about an hour for the votes to be counted, and when they were, management had prevailed by retaining its chosen slate of directors.

John Demyan smiled broadly. "I believe we can now go forward as a board," he said.

But his cousin, Susan, vowed to fight on.

"This is far from over," she said.

Pub Date: 3/14/97

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