A feud between the managers of a small Texas thrift and investors in its stock could lead to a proxy fight or even a lawsuit.

Shareholders of $154 million-asset East Texas Financial Services Inc. in Tyler are angry that the thrift's management paid off an investment group that offered to buy it last year. Some shareholders say that management, led by president and chief executive officer Gerald W. Free, should have negotiated a deal rather than buying back the investor group's 9.5% stake.

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