A Hero of Shareholder Suits Wages War against Banks amid 'Worsening' Ethics; Richard Greenfield's Specialty Is Knowing 'Where to Look for Skeletons'

By Newman, A. Joseph, Jr. | American Banker, October 17, 1984 | Go to article overview

A Hero of Shareholder Suits Wages War against Banks amid 'Worsening' Ethics; Richard Greenfield's Specialty Is Knowing 'Where to Look for Skeletons'


Newman, A. Joseph, Jr., American Banker


HAVERFORD, Pa. -- As you've read news stories about banks in trouble in the last half-dozen or so years, you've no doubt come across the name Richard D. Greenfield.

Mr. Greenfield, 42, a lawyer and senior partner of Greenfield, Chimicles & Lewis in this Philadelphia suburb, has gone to court in a fair share of bank class-action and derivative suits. He has come away with millions of dollars in settlements for shareholders and institutions -- and, of course, hefty fees for his firm as well.

He has taken on, among others, the First Pennsylvania Corp., Chase Manhattan Bank, Continental Illinois Corp., Crocker National Bank, Seafirst Corp., Equimark Corp. of Pittsburgh, and First Peoples Bank of Haddon Township, N.J.

"More than any other firm in the country," he said, "our firm has specialized in representing shareholders of banks and bank holding companies."

Not to mention savings and loan associations and thrift holding companies. It's hardly surprising that Mr. Greenfield's most recent foray into the courts -- a suit filed in Delaware in August -- took on the management of the beleaguered Financial Corporation of America. Financial's former management, he charges, turned the S&L into "a gambling machine."

"We've developed an expertise [in financial institution litigation] over the years," Mr. Greenfield said, "We know where to look for the skeletons." Booming New Specialty

Lawyers all over the country know where to look, too, when they seek experienced help in a booming new specialty -- shareholder litigation against banks, S&Ls, and their managements. About 90% of Mr. Greenfield's work is now outside the Philadelphia area.

Philadelphia is where he got his first taste of banking blood. That was in 1976 -- a $7 million award from Fidelcor Inc., its Fidelity Bank subsidiary, and Fidelco Growth Investors, a real estate-investment trust they launched. The suit was one of many he and other lawyers filed in real estate investment trust cases in those troubled days.

An accounting graduate of Queens College in New york, with law and MBA degrees from Cornell and Columbia, respectively, Mr. Greenfield's first experience in shareholder suits was not as a lawyer and had nothing to do with banking.

He was one of many plaintiffs in a class-action suit against The Villager Inc., a woman's apparel chain whose stock and been hovering around $40, then dropped to less than $1 in the late 1960s. As a onetime Villager employee, Mr. Greenfield recalls that he was able to help the class-action lawyers build a case against management that ended in a $3 million settlement.

"I decided I loved it," he recalled.

Mr. Greenfield had found a home. In 1970, he hung out his shingle as a class-action lawyer in an office on the third floor of his home in Philadelphia, a far cry from his present digs in Haverford, just across the street from the Haverford College campus.

The firm now boasts 12 lawyers, five paralegals and law clerks, and a support staff of 15. They occupy all of what had been a 16-family apartment house, which was turned into offices at a cost of "more than $1.5 million."

One Haverford Center, as the Greenfield firm calls the building, is solid evidence that his bank-thrift litigation niche is a growth business. About half the firm's business is now bank-thrift related. The rest, as you might expect, is also in shareholder actions. Firestone, Uniroyal, Mattel, Intel, and Baldwin-united have been, or are, on a long list of targets.

An increasing share of the firm's practice has stemmed from the use of tax-exempt bonds to finance life-care facilities in all parts of the country. Partner Nicholas E. Chimicles, 36, has been involved in two Philadelphia-area lawsuits, Fiddlers Woods and Baptist Estates, and the firm has been retained in three other similar bond offerings. …

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