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Shareholders in former PSFS win court ruling

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

Shareholders of the defunct Philadelphia Savings Fund Society won a federal 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 had 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 further appeal, or such an appeal is not granted, shareholders would likely be paid this year. After 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.