Evening star., 1937-10-07
FIDELITY OPENING
0N85-CENT BASIS
GIVEN APPROVAL
Controller Sanctions ''in
Principle" Revised Offer
of Federal President.
new CONTRACT TO BE
SUBMITTED TO COURT
Unofficial Estimates Place Open.
ing Date Two Weeks After
Court Action.

BACKGROUND
Fidelity Building and Loan Asso-
citation closed in July. 1886, iDith
claims OF nearly 1900 shareholders
amounting to approximately 81
100000. Negotiations to reorgan-
ise institution as First Federal Sat-
ings and Loan Association hate
been under ,Day since last Spring.
several times apparently dead
locked.
Controller of the Currency J. F. T.
OConnor today approved the revised
offer of First Federal Savings and
Loan Association to take over assets
of the old Fidelity Building and Loan
Association Immediately and make
available 85 cents on the dollar to
shareholders either in new shares or
cash.
The controller acted on the basis
of letter from Harry P. Somerville,
president of the First Federal; offer
ing to go forward now to take over
Fidelity assets.
The controller, the First Federal
and the Federal Home Loan Bank
Board have agreed lin principle" to
all details for the re-opening of Fidel-
ity under its new name, and steps
will be taken Immediately to complete
the transaction.
Contract Is Written.
contract hoe hoo,, u,ritfoy, %-
transfer the assets. 1t will be ap-
proved by the new First Federal and
the Federal Home Loan Bank Board
This contract will be submitted to the
court, with letter from the receiver
of Fidelity, James H. Nolan, asking
for court approval The petition te
the court, along with the proposed
contract for sale of the assets, should
be ready to file within a few days,
officials said.
Court approval will be necessary
before the actual transfer of assets
court does approve, it is expected thai
all speed will be resorted to by tht
First Federal Savings g. Loan Asso'
citation to open the new institution
Unofficial estimates placed the dat4
of opening at about two weeks aftel
court approval.
Somerville said in his letter to tn,
controller the First Federal is Willing
to proceed with the reorganization a
once, waving its previous requirement
that IS per cent of the Fidelity share
holders consent to accept shares of tn
First Federal and not insist on casl
settlement.
Since the reorganization plan wa!
submitted to the nearly $4,000 Fidelit!
shareholders on September 4, agree
ments to accept Fidelity shares il
settlement of their claims have beer
signed by shareholders representing
SO per cent of the approximate.
81, 400 900 share liability.
No Withdrawal Restrictions.
This response, Somerville wrot
O'Connor, has convinced the Firs
Federal board of directors that "ver.
substantial majority favors the pla1
and there is every probability of {
successful reorganization" under which
the First Federal could immediatel,
begin operations ION perfectly nor
NAL basis without restrictions upol
Withdrawals, so that shareholders VIII
desire cash will receive it,
First Federal officials made it clea
there would be no restrictions OF
Withdrawals if the reorganization goe
through, even on those who hav
signed the agreement to accept ne,
shares in lieu of cash.
If and when the First Federal take
over Fidelity affairs and opens it
doors, it was emphasized, Fidelit,
shareholders could obtain settlemen
of their claims at IS cents on tn
dollar, either all in new First Fedora
shares, all in cash or part cash an,
part shares in the new institution.