The Financial General takeover fight will go back to court again today as the company's lawyers try to block a preliminary step in the plan by Middle Eastern investors to make a tender offer for all the company's stock.
Financial General Bankshares Inc. has asked U.S. District Court Judge Oliver Gasch to issue an injunction halting the Middle Eastern group's recision offer to persons who sold stock before it was publiclly announced that a takeover attempt was underway.
The Middle Eastern group, represented by Washington attorney Robert Altman, agreed as part of a settlement of an SEC complaint last year, to give those sellers a chance to buy their stock back.
Under terms of the settlement, the recision offer must be made before the group can make a tender offer for Financial General.
Details of the offer were sent this week to several thousand Financial General shareholders who sold stock in December 1977 and January 1978 when the Middle Eastern group was buying Financial General shares on the open market.
Under terms of the offer, those sellers can either buy back their stock at the price they sold it for or get a cash payment equal to the difference between their selling price and $15 per share.
The Securities and Exchange Commission decided that all stockholders should have been told of the takeover attempt and required the Middle East group to set up a $1 million fund to compensate the sellers who didn't know. They can collect from that fund, however, only if a tender offer is made.
Terms of the recision offer to those shareholders were approved by the SEC, Altman said, but Financial General criticized the offering statement in a court request for an injunction that was filed yesterday.
The company's lawyers contend the 13-page letter to shareholders does not adequately explain the options available to them.