CCB Financial Corp. said Wednesday it will pay $1 million to settle a lawsuit arising out of its acquisition of a North Carolina thrift.
The Durham-based bank said it agreed to pay more to depositors of Graham Savings Bank, a thrift it acquired in a now prohibited transaction called a "merger-conversion."
CCB, which has $3.3 billion of assets, completed its acquisition of $125 million-asset Graham Savings last October after approval by the thrift's depositors on Sept. 21. But two dissident. depositors tried to reverse the purchase in state court, arguing inaccuracies in the proxy statement and a defective voting procedure.
CCB controller W. Harold Parker Jr. said the settlement effectively ends the lawsuit. "The litigation could have been very protracted," said Mr. Parker. "We could have spent untold thousands of dollars in legal fees. We just felt like for all parties concerned that it would be best to just settle the thing and go on."
The money will be distributed to Graham Savings as the"third and final "interest bonus payment" received by its depositors.
These depositors got a 1.25% bonus last October and will now get an additional 1% bonus next October for a cumulative benefit of $3 million.
Depositors in most mergerconversions done in recent years received no benefit beyond the right to buy the acquirer's stock at a discount.