Thrift Files Civil Complaint Over Allegations Of Takeover
Dec. 22, 1987
MIAMI (AP) _ A civil suit filed Tuesday claims a group of shareholders, including Andrew Cuomo, son of New York Gov. Mario Cuomo, ignored federal regulations in an attempt to merge two thrifts and drain their assets.
The complaint, filed by Lynn Fenster Smith, chairwoman of Oceanmark Federal Savings and Loan Association, claims Andrew Cuomo joined with real estate developer Sheldon Goldstein and others in a plan to take over the North Miami Beach thrift.
The suit charges the defendants planned to merge the company with a financially troubled Delray Beach thrift, Financial Security Savings and Loan, then sell off the assets.
Cuomo angrily described the Florida suit Tuesday as ''total nonsense'' and said it was caused by a ''business deal gone sour'' between shareholders and management.
Cuomo, a Manhattan lawyer and a key member of his father's inner political circle, said the lawsuit is actually a counterclaim to a suit filed by some shareholders seeking to oust Oceanmark's management.
He said he once was the attorney for a separate group that wanted to merge the two thrifts. The merger proposal last summer was rejected, he said, and he no longer represents the group.
He said he was named in the suit to embarrass shareholders who oppose current management.
''They want to use my name to give them leverage and I think it's a ploy,'' he said.
Cuomo, 30, ran both of his father's successful gubernatorial campaigns.
The complaint alleges that Cuomo, Goldstein and other investors bought shares in Oceanmark and gradually moved to assume control without going through proper channels with the Federal Home Loan Bank Board.
Lawrence Sykes, a supervisory agent with the Federal Home Loan Bank Board in Atlanta, was called repeatedly Tuesday but was not available for comment.
The suit, filed in Broward County Circuit Court, asks for monetary damages, punitive damages of $5 million and injunctive relief to prevent Cuomo, Goldstein and other associates from completing the alleged takeover.
Cuomo said he had acquired ''a fairly insignificant number of shares'' in Oceanmark two years ago. He said he couldn't remember exactly how many shares or how much they were worth.
A man answering the phone at Goldstein's Suffern, N.Y., home said Goldstein wasn't there and that he didn't know where he was. A call to Goldstein's Spring Valley, N.Y., office went unanswered.
Cuomo has represented Goldstein and been in partnership with him on several business projects. The two are on the board of directors of the Hudson United Bank in New Jersey.
The lawsuit claims Cuomo and others offered to buy Financial Security in July, but halted the deal after Ms. Smith ''learned of the scheme to slough off $4 million to $5 million of assets and refused to allow a merger to occur,'' said Ms. Smith's attorney, William Friedlander said.
Friedlander said a second civil complaint would be filed Monday in federal court asking federal regulatory agents to enforce their regulations concerning thrift takeovers.