Interco Inc. filed suit in federal court...

Interco Inc. filed suit in federal court in St. Louis accusing groups led by the Rales brothers of violating securities laws in their $2.7-billion bid for the retailing concern. The suit, filed against Cardinal Acquisition Corp. and City Capital Associates, claims their outstanding $70-a-share tender offer involves so much debt and so little equity that it would, if consummated, violate SEC margin regulations. The suit also alleges that the defendants failed to disclose that the takeover bid was being made on behalf of, among others, Drexel Burnham Lambert Inc. and Chase Manhattan Bank, both of which have equity stakes in Cardinal Acquisition.