WASHINGTON — The Federal Deposit Insurance Corp. Thursday will announce the claims process for thrift shareholders who last year won a breach-of-contract case stemming from the savings-and-loan crisis.
In one of many so-called “goodwill” cases following the thrift crisis, a judge in December awarded $276 million to shareholders of Meritor Savings Bank, which failed nearly 20 years ago in Philadelphia.
To tempt acquirers to merge with and save struggling institutions in the eighties, regulators offered them intangible assets known as “goodwill.” The assets, which would be written down over time, were meant to protect the acquirer from damaging effects of buying an insolvent bank. Yet many of those same acquirers failed after Congress — responding to the crisis — forced accelerated write-downs. A 1996 Supreme Court case said the government essentially had broken contract with the buyers.
Beginning Thursday, shareholders of Meritor — which was formerly known as the Philadelphia Savings Fund Society — can visit www.fdic.gov/bank/individual/failed/meritor.html for information on claiming their piece of the court award.
