After months of public feuding, the founding families of Chicago's Cole Taylor Financial Group have agreed to go their separate ways.
The company has decided to sell its bank subsidiary, Cole Taylor Bank, to an investment group led by the Taylor family. With the Taylor directors abstaining, the board approved the move by unanimous vote.
Meanwhile, the shareholder-owned holding company would retain control over the profitable auto financing operation.
"It's a very good deal for the shareholders, and that's what this is all about," said director Lori Cole, daughter of co-founder Irwin Cole and a leading spokesperson for her family's interests.
As a result of the deal, valued at between $82 million and $98 million depending on final details, Cole Taylor Bank would become the largest privately held bank in the Chicago area.
Control of the bank would rest firmly in the hands of Cole Taylor chairman Jeffrey Taylor, president Bruce Taylor, and co-founder and director Sidney Taylor. The three men would surrender those positions at the holding company, however.
Cole Taylor Financial would remain publicly held, with the Cole family members controlling one-third of the stock, and it would focus exclusively on the four-year-old subprime auto financing business. This division operates under the name Reliance Acceptance Corp.
Reliance reported net income of $9.6 million in 1995 and $3.6 million for the first quarter of 1996.
The long-awaited decision culminates almost eight months of public bickering between the two families over the future of the $1.8 billion- asset company.
The dispute began last fall - just 16 months after the bank went public - when Lori Cole publicly stated her desire that the bank explore all options, including a sale.
The Taylors initially opposed such action, believing that the bank's independent course would continue to serve shareholders. But in late October, the company hired investment bankers Chicago Corp. and Sandler O'Neill & Partners LP.
Ms. Cole denied the dispute left any bitterness between the two founding families. "There are no bad feelings between the Coles and the Taylors," she said. "We're very united on this."
As part of the transaction, which must be approved by regulators and shareholders, the holding company will receive about 4.25 million shares of Cole Taylor stock from the Taylor group, plus $90 million in cash and auto receivables from the bank.
No date has been set for the shareholders meeting, but officials expect to complete the transaction in early 1997.