One of Miami's largest independent banking companies faces an uncertain future in the wake of an order that its founder's family relinquish control.
Capital Bancorp, which has $1.7 billion of assets, was founded by Abel Holtz, one of Miami's most prominent social figures. It could go on the auction block now that his wife and two sons must leave the company, shareholders and analysts said.
"The ultimate object is to sell the bank," said a shareholder who asked not to be named. "This is common knowledge."
Mr. Holtz had transferred control to his wife, Fana, and sons Daniel and Javier before stepping down as chairman and chief executive officer in 1994. He pleaded guilty to lying to a federal grand jury investigating bribery charges against a former Miami Beach mayor, and he has been barred by federal regulators from taking any part in the company or even discussing it with his family.
Florida Comptroller Robert F. Milligan on Monday denied a request by the family members-all officers-to retain control of Capital Bancorp and its main subsidiary, Capital Bank. In his June 16 order, Mr. Milligan said the continued control of the company by the Holtz family jeopardizes the interests of its stockholders and creditors.
Fana Holtz is the company's vice chairman; Daniel is the chief executive officer and chairman; and Javier is executive vice president of Capital Bank and senior vice president of Capital Bancorp.
Mr. Milligan ordered the family to sell all but 25% of its stock and leave the company within 90 days. He gave them 45 days to submit a plan for doing so.
But the Holtz family isn't ready to give up, and a long court battle is predicted. An attorney for Fana, Daniel, and Javier Holtz said the family will appeal the ruling to the Florida Court of Appeals.
"It would be completely unfair if the Holtzes were required to take any action depriving them of their rights before they had the opportunity to have their case heard in a court of law," said D. Jean Veta, a partner at Covington & Burling in Washington. "This will be our first shot before a real court."
Capital Bancorp's stock closed at a 52-week high of $39.25 after Monday's ruling, up 3.3% from Friday's close of $38. Volume leaped to 22,400 shares, compared with 3,200 on Friday. Analysts cited the rises in price and activity as evidence that eager investors are trying to get a piece of the takeover target.
"The bottom line is this puts the bank in play," said Samuel J. Beebe, a bank analyst at William R. Hough & Co.
The comptroller agreed with a Florida administrative law judge that Mr. Holtz has continued to pull the strings at the banking company he opened in 1974. The ruling said that Fana, Daniel, and Javier Holtz provided no assurances that Abel Holtz would ever cease to have a "controlling influence" in the company's affairs.
The family, including Abel Holtz, owns 56.7% of Capital Bancorp's outstanding shares.
Ms. Veta said the comptroller failed to separate Abel Holtz from her clients, and she complained that they were unjustly judged because of his prior conviction.
But Eugene Stearns, attorney for four dissident shareholders who challenged the Holtz family's control, said the ruling is proof that Abel Holtz hasn't left Capital Bancorp.
Mr. Stearns praised the comptroller for issuing an order that, he said, should have been made when Mr. Holtz initially transferred control to his family.
A source closely associated with the company said the mood wasn't good among lower-level employees, who fear it will be sold and they will lose their jobs.
