Golden State Settles Shareholder Lawsuit

Golden State Bancorp Inc., the No. 2 U.S. thrift, won a Delaware judge’s approval Monday of a settlement of shareholder suits over its acquisition by a San Francisco-based thrift owned by financier Ronald O. Perelman.

Perelman’s First Nationwide Holdings Inc. agreed in February 1998 to pay $2.5 billion for control of Golden State in a so-called reverse merger. Perelman and associates wound up with as much as 45% of the combined thrifts’ stock. Shareholders were slated to split the remaining 55%.

Three Golden State shareholders quickly filed suit in Delaware Chancery Court, contending they weren’t getting enough of a stake in the new thrift for their shares. They later agreed to settle their class-action suits after Perelman and Golden State officials released more financial details about the transaction and an expert’s report on the fairness of the acquisition.

While the settlement didn’t result in more money for Golden State shareholders, Chancery Court Chief Judge William B. Chandler III said investors benefited from having access to the updated fairness opinion.

“This court has noted that even a meager settlement that affords some benefit to stockholders” is worthy of approval, the judge said in an 11-page decision.

But given the “modest benefit to shareholders,” Chandler chopped the $1.3-million fee requested by lawyers for Golden State shareholders to $500,000.

“In my opinion, an award of $500,000 is generous in the circumstances of this case,” the judge said.

The Chancery Court settlement also resolves several similar cases filed in state court in Los Angeles over the acquisition, lawyers involved in the case said.

Shares of San Francisco-based Golden State, which operates 352 California Federal Bank branches in California and Nevada, fell 63 cents to close at $15.38 on the New York Stock Exchange.