An investor group has dropped a shareholder lawsuit against BankAtlantic Bancorp of Fort Lauderdale, Fla., after the case languished in court for six years.
The shareholders, who once owned about 25% of the stock in the company, filed a motion last week to drop a suit that charged the $1.5 billion-asset thrift with breach of contract stemming from a stock purchase in 1988.
"The stock has increased in value, and many people simply lost interest and were tired of waiting," said Elliot P. Borkson, a Fort Lauderdale lawyer and BankAtlantic stockholder who filed the suit on behalf. "And quite truthfully, the bank has done very well. It's doing a lot better than a lot of the other S&Ls or banks."
The suit charged the company's chairman and chief executive, Alan B. Levan, with refusing to purchase stock held by minority shareholders for the $18 a share it had paid to a single shareholder.
Florida investor M. Lee Pearce sold his 9% stake in BankAtlantic to BFC Financial Corp., an investment company that already owned 53% of BankAtlantic, in 1987 for $18 a share. The stock closed that year at $9.50 a share. Today, it's trading at $15.50.
BFC, which is partly owned by Mr. Levan, refused to buy out the minority shareholders at that price, citing worsening market conditions.
"We've always contended that the suit was ill-advised," said David Finkelman, a BankAtlantic spokesman. "And so naturally we're pleased with the announcement. We never believed there were grounds for the allegations."
Mr. Borkson and others said that the company's strong performance in recent years helped to undermine the complaints against it.
Deborah R. Beylus, an analyst at J.W. Charles/CSG in Boca Raton, Fla., recently upgraded the company's stock to "buy" for the first time. Its net interest margin of 3.91% is well above its peer average, and its returns on equity and assets of 17% and 1.17%, respectively, are also impressive, she said.
The same investor group in August dropped a separate lawsuit that charged the company's directors with mismanagement. That suit contended that the company's managers had squandered the thrift's resources to drive down the stock price, among other allegations.