Judge: Current shareholders to get PSFS payout

A federal judge made a highly anticipated ruling Friday on the question of which set of shareholders in the defunct Philadelphia Savings Fund Society should receive the $276 million awarded in damages for the improper closing of the bank in 1992.

The question, raised by a former director who sold his shares at a loss in 1993, was whether the money should be paid to current shareholders - including some hedge funds that may have bought the shares for a penny a piece - or to shareholders at the time of the bank's seizure by the Federal Deposit Insurance Corp.

Senior Judge Loren A. Smith, of the U.S. Court of Federal Claims in Washington, ruled that the "$276 million will be distributed among the current shareholders."

The next step is a Dec. 1 conference call between the judge and attorneys for the government and current shareholders to discuss a final order.

The final order will turn the $276 million over to a receiver appointed by the FDIC and instruct the receiver to establish procedures for shareholders who hold stock certificates or have shares in an electronic brokerage account to make their claim.

John Mikus, 84, of Northeast Philadelphia, who has 125 shares, was very happy to hear of the judge's ruling.

"I really feel as though, if I do get the money, whatever the amount, it's like finding it out on the street," Mikus said.

"I just didn't expect it. I do appreciate the efforts of those who were instrumental in turning this around," he said.

Shareholders are expected to get about $4.50 for each share in PSFS, which changed its name to Meritor Financial Group in 1985 after it went public for $11.75 a share in 1983.