Magazine article American Banker

Director Hints at Attempted Takeover of Fortune Group

Magazine article American Banker

Director Hints at Attempted Takeover of Fortune Group

Article excerpt

WASHINGTON -- A director and principal shareholder of Fortune Financial Group Inc. told federal regulators last week that he may purchase more of the Clearwater, Fla., thrift holding company's stock or enlist a third party to attempt a takeover.

Kenneth M. Kirschner, a Jacksonville, Fla., lawyer who controls 9.9% of Fortune Financial's common stock through several partnerships, said in a filing with the Securities and Exchange Commission that he will closely monitor developments at the company and may try to oust its management.

Mr. Kirschner's actrivity is apparently related to his charge that Fortune Financial denied him and other company directors knowledge of discussions between Fortune Financial and the Federal Home Loan Bank Board. The discussions involved Fortune Federal Savings and Loan Association's "possible failure to comply" with Bank Board regulations and a "lack of a defined business plan."

Fortune Federal S&L, with $1.8 billion in assets, is the principal subsidiary of Fortune Financial, a $1.6 billion company.

According to Mr. Kirschner, Fortune Federal's liability growth rate had risen to 34.2% over two consecutive quarters, well above the 25% rate normally allowed by the Bank Board without prior approval.

In a letter to Fortune Financial chairman John Sweger, Mr. Kirschner said that he had learned from the Bank Board that Fortune Federal negotiated a settlement with the Bank Board which limits the thrift's future liability growth.

Fortune Financial president Rausey Mason said, however, that the directors of Fortune Federal had been informed of the agreement. …

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