Capital Bancorp, the problem-plagued Miami parent of $1.7 billion-asset Capital Bank, was told last week that it will be kicked off the Nasdaq trading system, effective next Monday.

While the delisting is unlikely to affect Capital's pending purchase by Union Planters Corp. of Memphis, it would be a problem for Capital should the planned $358 million merger fall through.

"If we have no Nasdaq listing, it will obviously affect the market value and the liquidity of the stock," said Eugene Stearns, an attorney representing a group of dissident Capital shareholders.

Nasdaq spokesman Mike Shokouhi said the trading system requires listed companies to hold annual meetings. Capital Bancorp hasn't held an annual meeting since joining Nasdaq two years ago.

Lucious T. Harris, Capital Bancorp's chief financial officer, blamed "unresolved legal and regulatory issues" this Monday for the company's failure to hold an annual meeting. Capital will contest the delisting, he said.

The delisting is another in a roster of problems plaguing Capital Bancorp and its primary shareholders, the Holtz family.

In June, Florida's comptroller issued an order declaring the family "unfit" to control Capital, which was founded by its patriarch, Abel Holtz, in 1974. Mr. Holtz resigned from the bank in 1994 after pleading guilty to perjury charges and turned over control to his wife, Fana, and sons, Daniel and Javier.

The comptroller's order required the family to reduce its ownership stake from 57% to less than 25% by mid-September. However, last week the comptroller's office agreed to let the Holtzes vote their 57% when the merger vote is taken. In exchange, the family must sell all its shares.

Dissident shareholders, suing the Holtzes for alleged mismanagement, have appealed the comptroller's ruling, saying the family should not continue to control more than 50% of the voting shares.

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