Checks should be mailed by Friday to shareholders of the now-defunct Rock Hill Bank and Trust who have waited years to be paid for their losses when the bank was sold.
They'll receive $1.02 per share, or almost $8 less per share than they asked for in two class-action suits settled in February.
For shareholders, it's been a long time coming.
"I think they're dragging their feet," said shareholder Al Smith of Rock Hill. "They're waiting until the 11th hour to pay the bill."
The checks bring the 1,100 shareholders one step closer to the end of RHB&T, which in July 2002 had to fire its president, Rob Herron, then a Rock Hill City Council member, for irregularities in the commercial loan department. The bank was nearly taken over by the Federal Deposit Insurance Corp. when an investigation revealed it needed $20 million to cover problem loans. Instead, it was sold to South Financial Group of Greenville.
Named in the class-action suits are two bank officers and eight directors, Herron and the accounting firm of Tourville Simpson and Caskey, which was dissolved and sold. Stockholders wanted the difference in the $14.35 trading price the day Herron was fired and the $5.50 per share they received from South Financial.
Steve Tilghman, president of Tilghman and Co. and claims administrator for the shareholders, said letters for both settlements will be sent on or before Friday. He said some people will not get the full amount they're due because he needs paperwork from them to file with the Internal Revenue Service.
$700,000 goes to attorneys
While the entire settlement fund is $2.1 million, about $700,000 will be spent on attorneys fees, according to the agreement. The shareholders will share $1.3 million based on the number of shares records indicate they held.
Tilghman said shareholders whose brokers held the stock will not get a letter. Rather, the broker will get the letter and send the money to the shareholder.
He would not provide a copy of the accompanying letter, saying he wants shareholders to see it first.
The class-action suits stated the bank had losses two straight years because of employee misconduct, and it claimed officers and directors failed to monitor employees and loan activity. Directors have claimed they performed their job in good faith and have blamed all the problem loans on Herron. He lost his council seat and later served jail time when he and two Fort Mill men pleaded guilty to fraud in an unrelated loan scheme. Herron served 15 months in a federal prison and was released in 2005.
Bank directors, officers and South Financial, which owned 22 percent of RHB&T stock at the time, did not benefit from the settlement.