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Angry clients of Manley, Bennett, McDonald & Co., hoping to seize the remaining assets of the former brokerage house based in Detroit, have besieged the firm with lawsuits.
Manley, Bennett has sold most of its assets to Thomson McKinnon Securities Inc., of New York City. Two lawyers who represent investors said the sale was a bid by Manley, Bennett to sidestep the huge claims pending against the firm.
The major suits pending against Manley, Bennett charge the firm with fraud, negligence, or improper disclosure in selling or underwriting unsound investments.
Clarence Higby, CEO of MBM Group Inc., the holding company that owns the corporate remains of the brokerage house, said the clients' suits seek about $28 million from the firm. MBM Group has about $7 million in assets to settle the suits, including $5.7 million in cash at Manufacturers National Bank, he said.
Higby revealed MBM's financial condition in a confidential letter to MBM shareholders. The letter, dated Sept. 5, was obtained by Crain's Detroit Business.
Higby declined to comment on the letter or on MBM Group's legal and financial condition.
MBM Group sold its brokerage business to Thomson McKinnon in July 1984. The assets of MBM Group's brokerage subsidiary, MBMC Inc., dropped from $38 million nine months before the sale to $6.8 million three months afterwards, documents show.
The brokerage house had nine offices in Michigan and one in New York City, the 1983 filing says.
Jon Berkey, a Birmingham attorney for about 60 investors who purchased cattle-breeding herds through Manley, Bennett, said MBM...