Magazine article American Banker

Illinois Thrift Shareholder Drops Proxy Suit but Presses Directors to Shape Up or Sell

Magazine article American Banker

Illinois Thrift Shareholder Drops Proxy Suit but Presses Directors to Shape Up or Sell

Article excerpt

A Hinsdale Financial Corp. shareholder who recently settled a lawsuit with the company says the Illinois thrift hasn't done enough to enhance shareholder value.

"I'm not pushing for the bank to run out and look for somebody to buy it," said William E. Jegen, an attorney who became a shareholder when the $670 million-asset company converted from a mutual in July 1992.

"What I am trying to get the board to understand is, if they do not pay attention to shareholder value and liquidity, they may be susceptible to an unfriendly takeover," he said. "It is a legitimate goal to remain an independent bank, as long as you run the bank better than average."

As part of the suit settlement, Mr. Jegen abandoned a proxy fight to get two new directors on the board, including himself. He nevertheless still intends to make a proposal on enhancing shareholder value at Hinsdale's annual meeting on Valentine's Day, believing the board has not paid attention to the issue.

"Instead, the board has merely continued to run a bank in the same manner they were running a mutual savings and loan," Mr. Jegen said.

Kenne Bristol, president and chief executive of Hinsdale, said that although the board agrees that "value hasn't been realized fully," the company has been and remains dedicated to building value and providing information to shareholders.

For instance, Hinsdale's long-term growth strategy includes focusing more on consumer lending and expanding stock and mortgage broker services, he said. The board also declared a special stock dividend last year, he said. …

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