A Montgomery County court yesterday ordered Government Services Savings & Loan not to hold its annual stockholders' meeting today, giving dissident investors more time to try to unseat the association's board of directors.
Government Services President Alexander R.M. Boyle said the annual meeting has been rescheduled for Sept. 11.
Ruling against Boyle and the Government Services' board, Circuit Court Judge Calvin R. Sanders also ordered that a list of Government Services' stockholders be given to the dissident group headed by Emanual Baker Jr., president of Town & Country Properties, a Northern Virginia real estate firm.
Sanders ruled after 21/2 days of hearings in a lawsuit filed against Government Services by Baker's group.
The judge said the Government Services board acted unfairly when it moved the meeting from Aug. 28, when it had been held for several years, to Aug. 14.
The board advanced the meeting date "with the purpose of interfering with a contested election for directors, thus perpetuating the existing board in office," Sanders said.
Boyle insisted yesterday the meeting date was moved up only to avoid adverse publicity resulting from the unusual fight for board seats.
Yesterday's court ruling will have no effect on the continued operations of Government Services, the largest savings and loan in Washington's Maryland suburbs, he said.
Government Services has lost more than $4 million in the last 15 months. Because of the losses, its reserves have fallen below the usual minimum required by state regulators. The regulators have taken no action, however, because Government Services has plenty of cash and other assets.
The association plans to sell its headquarters site in Bethesda, a move that would restore its reserves and provide additional capital.
The proposed sale of the real estate is one of the moves Baker's group has criticized. The group has pledged to bring in a new president if it wins the board election.
Government Services is one of a handful of local savings and loan associations that are publicly owned companies. As a result, the infighting that often takes place behind board room doors is being done in full view of depositors and stockholders.
Last month, Baker's group went public with a dispute that had been smoldering for some time. About 20 percent of Government Services' stock is controlled by the four members of Baker's shareholders committee.
They are trying to attract the support of holders of enough additional stock to replace eight of the 10 present board members with their own nominees and then revamp Government Services' management.
Spokesmen for both sides said yesterday they plan to make additional appeals to stockholders for support before the meeting.
The dissidents claim Government Services has been mismanaged. They argue that the association should not sell its Bethesda property without approval of shareholders and that it should take other steps to reduce its losses.
Boyle and the present board said the S&L's losses are symptomatic of problems in the entire savings and loan industry, which has been battered by high interest rates.