WASHINGTON --Seventeen mutual thrifts whose stock offerings could have been held up by a recent court decision were quietly released from limbo Wednesday.
The 17 thrifts planning to raise at least $587.2 million from Wall Street had been caught up in a controversy over whether the Office of Thrift Supervision had followed proper procedure in adopting a provision in its new role on mutual thrift conversions that requires thrills selling stock for the first time to favor depositors within a 100-mile radius of the institution.
An ad hoc group called the Thrift Depositors of America Inc. sued over the provision, and won Sept. 29 in the U.S. District Court for the Distric of Columbia.
On Wednesday, the OTS andd TDA agreed that the 17 thrifts could go to market as long as their depositors could buy the same amount of stock, no matter where they lived.
The group's members place deposits in mutual thrifts across the country while waiting for them to go public.
After buying shares, they usually reap large gains because the stock price typically rises quickly as soon as it begins trading.
Murray A. Indick, a lawyer with Wilmer, Cutler & Pickering, which represents the depositors group, said, "The TDA was delighted to have the court issue the order implementing the earlier opinion so that all pending deals could be closed in due course."
But he cautioned that this may not be the end of the dispute.
"The next step is to wait and see what the OTS final rule looks like on the subject."