The check is in the mail . . . finally.
Only 14 months after it was approved by a federal judge, a settlement between the former MNC Financial Inc. and some of its shareholders is bearing fruit.
Shareholders who bought MNC stock between January 1989 and February 1991 began to receive checks yesterday as settlement to a class-action lawsuit filed in 1990 against the company, which since has been acquired by NationsBank Corp.
The suit alleged that MNC failed to inform the public of the large problems facing the company starting in 1989, problems that culminated in large losses and drove the price of its stock from a peak of almost $30 a share in October 1989 to less than $3 a share by February 1991.
Without admitting any wrongdoing, MNC agreed in April 1992 to settle the case for $8.8 million.
But don't go buy that Christmas Porsche yet.
The formula for determining one's claim related to the purchase price of the claimant's shares, minus the $2.625 per share that MNC was worth on Feb. 1, 1991. (If the shares were bought after July 24, 1990, the claim was discounted by 65 percent on the theory that the company's troubles were better-known by then).
The $8.8 million would then be prorated among the claimants according to the size of their individual claims -- but not until all the fees were paid out: $293,836 to the settlement administrator, and a total of $2,780,742 to law firms.
What did that leave for stockholder Jacob Gitomer, of Baltimore?
Mr. Gitomer said he bought 3,400 shares in late 1990, at an average price of about $5.03 a share. If enough money was available to pay all claims in full, his portion would have been more than $2,800, according to the payout formula.
Mr. Gitomer received his check yesterday -- a grand total of $7.74.
"It cost me more than $7.74 in postage to mail them all the documents," Mr. Gitomer laughed.