Mason-Dixon Bancshares is firing back at a shareholder group that is pressing it to sell, alleging in a lawsuit that the group illegally amassed stock in the bank.
The Westminster, Md.-based company filed suit Dec. 9 in U.S. District Court in Baltimore against Anthony Investments Inc., a shareholder group that includes several former executives and directors of Mason-Dixon's two subsidiary banks.
The suit charges that Anthony Investments violated federal securities laws and Maryland bank acquisition laws through its acquisition of 5.1% of Mason-Dixon's stock. The group's 17 members had all owned the stock separately, but pooled their 268,671 shares together last month under Anthony Investments.
Mason-Dixon's lawsuit charges that the group acquired the 5.1% stake in the $838 million-asset company without the necessary approval of the Maryland bank commissioner. The suit also alleges that the group violated federal securities laws by soliciting more than 10 proxies before sending shareholders a registered proxy statement.
A spokesman representing the shareholders said that Anthony Investments had not yet reviewed the lawsuit and had no comment.
The ownership by Anthony Investments was disclosed in a filing with the Securities and Exchange Commission in late November. In the documents, the group said it wanted Mason-Dixon to find ways to maximize shareholder value, including a potential sale.
Thomas K. Ferguson, president and chief executive of Mason-Dixon, declined to comment.
Mason-Dixon wants a federal judge to grant an injunction to bar Anthony Investments from soliciting additional shareholders and from exercising any voting rights.
Mason-Dixon officials said the group is using a "campaign of misinformation" to force the bank's sale, and also questioned the motives of Anthony Investments' president and founder, Barbara S. Floyd.
Ms. Floyd is a former chief financial officer of Mason-Dixon's main subsidiary, Carroll County Bank and Trust Co. Mason-Dixon in the suit said Ms. Floyd was a "disgruntled" former employee who left the bank because she was passed over when Mr. Ferguson was named president. Also, Anthony Investments would receive a consulting fee from the shareholder group upon the sale of Mason-Dixon or an increase in its stock price above $17.50, according to the SEC filing.