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Two years ago it was becoming routine. One by one, Baltimore's largest financial services firms were running headlong into the recession.
Headlines announced the news. MNC Financial stock nosedives after fed examination; USF&G Corp. earnings pummeled by real estate investments; regulators seize Yorkridge-Calvert Federal Savings and Loan Association.
At the time, only one thing was moving faster than their falling stock prices--the legion of lawyers who were racing into federal court to file suits against Baltimore's faltering firms.
Claiming directors at the publicly held companies knew or should have known of the looming losses--and neglected to tell shareholders--eight law firms leveled shareholder suits against MNC. Twenty-one filed suit against USF&G. Three filed against Yorkridge-Calvert.
From the minute they hit the court docket, the shareholders' claims were played down by the companies they targeted. In annual reports, the suits were blown off as not being material to the company. Most said the shareholders' claims would be thrown out, or laughed out of court.
But the once highly publicized suits continue their relentless crawl through the courts. And one by one, they are forcing companies to make tough deisions: to go to the mat in a jury trial, or take a dive and cut their losses.
Shareholders' attorneys are banking that the companies will dive.
"Rarely does the case get to the merits," says one attorney involved in similar suits.
This week, General Physics joined a lengthy list of area companies that have been sued by shareholders. In the suit, the investors claim the company inflated estimates of recent earnings to boost its stock price.
The company's stock...