Shareholder in former PSFS win court ruling

Shareholders of the defunct Philadelphia Savings Fund Society won an appeals court ruling Friday that moves them closer to collecting a $276 million judgment from the Federal Deposit Insurance Corp.

The long-running PSFS court fight was launched in 1993, when investor Frank P. Slattery Jr. sued the FDIC, alleging that it illegally forced the bank out of business during the savings and loan crisis.

What happens next depends on whether the federal government appeals to the U.S. Supreme Court. "I don't know what their arguments would be at this point," said Slattery, who said he owns less than 1.5 percent of the 54 million shares in Meritor Savings Bank, the name PSFS took after its ill-fated 1982 merger with Western Savings Bank.

Slattery's lawyer, Thomas M. Buchanan, of Winston & Strawn L.L.P. in Washington, said that if there is no appeal, or the appeal is not granted, shareholders would likely be paid this year. Net of legal expenses, shareholders would receive an estimated $4.63 per share.

The shares, which trade over the counter, closed Friday at $3.38, up 99 cents, or 41 percent.

"I'd be disappointed if the government still tries to appeal," said Watson Gutowski, a Newtown Square resident who said he has been a shareholder for at least 20 years.