WASHINGTON - A community group has sued First Union Corp. in an attempt to derail the bank's acquisition of First Fidelity Bancorp.
The Neighborhood Assistance Corporation of America, which has been boisterously protesting the deal on Community Reinvestment Act grounds, charged Tuesday that the bank had improperly prevented group leaders from participating in the shareholders' discussion and vote on the merger Oct. 3.
The group asked a Mecklenburg County judge in North Carolina to order the bank to hold a new stockholders meeting. Bruce Marks, the group's executive director, said he expects the court to act by early December, well before the banks can consummate the merger.
First Union spokesman Jeep Bryant said the group's allegations are groundless. The bank allowed anyone who returned their registration card or who brought their proxy card with them to attend, he said.
"The same rules and procedures were applied equally to everybody," he said.
Mr. Marks, who owns shares in First Union, said the bank used the registration process as a pretext to stifle opposition to the deal.
"They used it as a context for not having to go face-to-face with 200 African-Americans," Mr. Marks said. "That is what they used it for."
Mr. Bryant disputed this, saying the bank asked people to preregister so it could hold the meeting in a room of appropriate size.
Nearly 90% of the shareholders approved the deal at the special stockholders meeting. The deal now needs regulatory approval, which is expected to come shortly.
