Beneficial Mutual Bancorp has obtained a large stake in Liberty Bell Bank after a controversial borrower defaulted on loans backed by the New Jersey bank's stock.
Beneficial (BNCL), a $4.6 billion-asset Philadelphia company, said in a regulatory filing earlier this month that it has no plans to try force a change of control at the $170 million-asset Liberty Bell. Beneficial, which disclosed a 25.4% stake in Liberty Bell, said it has approval to sell the stock.
A group of investors, led by Michael Kwasnik, Liberty Bank's co-founder and former chairman, has repeatedly quashed the Marlton, N.J., bank's attempts to issue new common stock or create new classes of stock. Kwasnik, who co-founded Liberty Bell Bank in 2002, has also launched several failed efforts to take control of the bank.
William Dunkleberg, the chief economist at the National Federation of Independent Business, succeeded Kwasnik as the bank's chairman.
In November, a grand jury in state superior court in New Jersey indicted Kwasnik on charges that he stole more than $1 million from a 96-year-old woman in Cherry Hill, N.J., after she hired him to form a family trust.
Beneficial said in its filing that it loaned $4.2 million in May 2006 to a group that included Kwasnik and his law firm. The group pledged their holdings of Liberty Bell stock as collateral for the loan. Beneficial gained more than 760,000 shares of Liberty Bell stock when the borrowers defaulted; all but two members of the borrowers' group signed a settlement agreement last month allowing Beneficial to sell the shares.
One of the members of the borrowers' group, Liberty State Financial Holdings Corp., has filed for bankruptcy in federal court in Delaware. Beneficial said it received court approval to sell the Liberty Bell Bank shares owned by the bankrupt company.
"Our intent is to realize the value of the loan made to Michael Kwasnik," said Thomas Cestare, Beneficial's chief financial officer, in an interview Thursday. "This is by no means a way to try to control Liberty Bell."
Kevin Kutcher, Liberty Bell's president and chief executive, did not return a call seeking comment.
Liberty Bell in January had asked regulators for approval to form a bank holding company to acquire the bank, though the request was withdrawn a month later. Documents filed with the Federal Reserve Board did not disclose a reason the application was withdrawn.