Group files suit to oust bankers Dissident shareholders say Mason-Dixon CEO, chairman violated trust

March 15, 1997|By Bill Atkinson | Bill Atkinson,SUN STAFF

A group of shareholders has filed a lawsuit against top executives of Mason-Dixon Bancshares Inc., alleging that they intentionally blocked acquisition attempts and therefore caused stockholders to suffer millions of dollars in losses.

The group called for the ouster of Thomas K. Ferguson, president and chief executive of the Westminster-based banking company, and its chairman, William Dulany, for violating their duties to shareholders.

It also is seeking a temporary restraining order to stop Mason-Dixon from issuing its proxy statement next week because it allegedly contains "false and misleading" statements about the stockholders group.

Barbara Floyd, an investor who is leading the 19-member dissident group, declined yesterday to comment on the filing.

Ferguson and the bank's attorneys were in court and could not be reached for comment.

Mason-Dixon has $838 million in assets.

It is the parent company of Carroll County Bank and Trust Co. and Towson-based Bank of Maryland, which it acquired in July 1995.

The lawsuit, filed late Thursday in U.S. District Court in Baltimore, alleged that Ferguson and Dulany acted as "roadblocks" to inquiries from other banks.

In September 1995, Dulany met with the chairman of Dauphin Deposit Corp. to discuss acquiring Mason-Dixon, the lawsuit said.

But Dulany never informed the board of the meeting and he "unilaterally rejected Dauphin's expressions of interest," the lawsuit said.

The Harrisburg-based bank agreed in January to be acquired by Baltimore-based First Maryland Bancorp.

The group claims that shareholders have lost an estimated $97 million because management failed to consider offers.

Among other demands, the shareholders want the bank to form a merger and acquisition committee made up of board members who don't work for the company, and to terminate all "golden parachute retirement programs" for executives, the lawsuit said.

This is the latest salvo in a fight that erupted Nov. 22 when the investors said publicly that they wanted management to consider selling the bank.

Mason-Dixon countered nearly three weeks later with a lawsuit alleging that the group illegally acquired 5.1 percent of the company in violation of federal securities laws and Maryland bank acquisition laws.

Pub Date: 3/15/97

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