Ex-MNC executive's severance pay in doubt
After Peter Gartman left his job as vice chairman and chief financial officer of MNC Financial Inc. in May, he told the company in no uncertain terms that it had promised him a hefty severance package, including future consulting fees and a percentage of his salary for a certain period.
But those who recall what the federal Office of the Comptroller of the Currency (OCC) did to former MNC chairman Alan Hoblitzell more than a year ago probably can guess what happened to Mr. Gartman's money.
In February 1991, several months after Mr. Hoblitzell retired, the OCC ordered MNC to seek the return of $1.2 million paid as partial severance to Mr. Hoblitzell, who duly returned the money.
The original severance package apparently rankled official Washington so much that a subsequent bill empowering regulators to limit "golden parachute" payments included a provision that some in Congress were calling "the Hoblitzell amendment."
Mr. Gartman's severance package was not a golden parachute in the sense that it wasn't contingent on a change of control at the banking company. But several sources inside and outside the company said the OCC, which along with the Federal Reserve is keeping a very close watch on MNC, nixed it anyway. Mr. Gartman, the company and the OCC declined to comment.
PaineWebber Inc.'s Hunt Valley and New York City offices have been the subject of a week-long -- and counting -- examination by teams from the Securities and Exchange Commission, the brokerage confirmed.
What PaineWebber would not discuss was a report that the examiners are looking into allegations of unethical practices in the two offices. Purported details of the allegations, attributed to anonymous sources, were published this week in the McGraw Hill publication Securities Week.
PaineWebber, in a statement, called the SEC examinations "routine and customary."
In response to questions from The Sun, the company said "We have no comment on statements of which we have no knowledge, made by unnamed sources. We value our relationships with our clients.
"If any client has made an inquiry regarding his or her account," the statement said, "those matters were handled promptly, courteously and professionally."
The SEC said its policy is not to comment on such matters.
Janitorial experience pays off in big way
When Baltimorean Paul Reamer sold his janitorial services company, Associated Building Services, to ARA Services Inc. 22 years ago, he probably thought he'd washed his hands, so to speak, of the cleaning business for good. But the recent sale of a Cincinnati maintenance company proved the value of his experience in the janitorial industry.
Mr. Reamer is now president of Executive Sounding Board Ltd., a Baltimore merger and acquisition consulting company. Because of his past affiliation with the "rags" trade, Mr. Reamer got a call from Martin Kelly, whose Kelly Holding Co. was looking to sell its Cincinnati subsidiary, North American Janitorial Services, a $2 million company.
The buyer Mr. Reamer found was GSF Safeway Inc., the Indianapolis unit of Groupe Services France, a $250-million-a-year company based in Valbonne Cedex, France. Mr. Reamer helped complete the deal last week. ESB's typical fees are 10 percent of the first $500,000 in purchase price and progressively smaller cuts of the rest.
Mr. Reamer's story shows how your past can come back to haunt you, or, in this case, "help feed me," he said.
Banks must give up escrow interest Oct. 1
After several hard years of battle, the banking and title companies of Maryland finally lost their war against the law firms and low-cost housing advocates in the last legislative session. What that means for title companies is that they no longer can keep the interest earned while holding clients' escrow accounts.
For banks, it means another recordkeeping headache, and the time to reach for the Tylenol is Oct. 1. In a recent letter to all banks, Bank Commissioner Margie Muller warned that financial institutions must start sending the interest earned on title
company trust accounts to the Maryland Affordable Housing Trust.
Title companies defeated the legislation for years, partly by complaining about the unfair public taking of their money, which is earned when a homebuyer, for example, gives the purchase money to the title company to disburse to the seller a day or two later. Law firms that do the same type of settlement work as title companies have had to give up their escrow interest for years.
Title companies found banks on their side of the fight because many banks keep the escrow interest as a cost of doing business. Ms. Muller suggested the same person or department that handles the law firm interest accounts should handle the new title company requirement.
Banks and title companies can take some consolation in the knowledge that the money, predicted to be a few million dollars a year, will go toward affordable housing in Maryland.