Attorneys for Texas and Washington businessman Joe L. Allbritton yesterday defended Allbritton's attempts to seize control of Riggs National Bank and portrayed legal attempts by the bank to prevent it as a last-minute attempt by incumbent management to save itself.
U.S. District Court Judge Norma Johnson is expected to rule today on a motion by Riggs Bank for an immediate order to bar the takeover of Washington's largest financial institution pending determination of charges by Riggs that the takeover violates federal banking and securities law.
The takeover was set in motion Feb. 9 when Allbritton tendered an offer to buy at least 600,000 shares of Riggs stock for $67.50 a share, a price then well above the level at which the stock was trading.
During two hours of arguments yesterday, attorneys for Riggs contended that shareholders were being asked to make a decision about whether to sell their stock without adequate financial information about Allbritton's finances or the finances of two Allbritton-controlled corporations that the bank alleges are involved in an orchestrated takeover attempt with him.
They also argued that Allbritton is violating laws that preclude bank holding companies from controlling more than 5 percent interest in banks in more than one state.
Noting that Allbritton has taken on indebtedness of $80 million, repayable in two years, to finance his stock acquisition, Riggs attorneys questioned whether allbritton would drain capital away from the bank to help meet other obligations.
"What kind of a bank is this going to be if Mr. Allbritton is successful?"
asked bank lawyer C. Roger Nelson, who called Allbritton's attempts "an effort to stampede shareholders into tendering shares without adequate information."
Allbritton attorney Jeffrey Glekel of the New York-based firm Skadden, Arps questioned the timing of Riggs' move to the courts and said that the bank's claims appeared to constitute "a fishing expedition."
"We don't have any shareholders here complaining about Mr. Allbritton's tender offer. They're not complaining," he said. "The only complaint is from incumbent management."
In another development Riggs yesterday filed a petition with the Federal Reserve Board asking the Fed to look into the takeover attempt and making charges similar to those made in court.
Separately, a spokesman for Allbritton revealed that neither the Federal Trade Commission nor the Justice Department raised any antitrust questions about Allbritton's proposed stock acquisition as of a midnight deadline Tuesday.
The arguments over whether Judge Johnson should grant a restraining order to bar the takeover temporarily centered on whether the bank would be done irreparable harm if events proceeded.
On the contrary, said Glekel, Allbritton and the shareholders might be harmed if the tender offer is interfered with. "Any delay in his purchasing shares could result in his never consummating that action," he said.
Neither Allbritton nor Riggs chairman Vincent C. Burke were in the courtroom for arguments yesterday. The hearing is scheduled to resume at 9:45 this morning.