Old Stone, largest stockholder eye dissolution, receiver appointment

By Caroline Salls

Pittsburgh, June 6 - Old Stone Corp. and its largest stockholder Manticore Properties, LLC filed a petition with the Rhode Island Superior Court seeking dissolution of Old Stone and the appointment of a receiver to distribute its remaining assets to the holders of its outstanding cumulative voting convertible preferred stock, series B, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

Providence, R.I.-based Old Stone said it was the parent company of the former Old Stone Bank until the bank was seized by the federal Resolution Trust Corp. in January 1993.

The company sued the federal government for breach of contract and was awarded damages of $192.5 million by the U.S. Court of Federal Claims, which was reduced to $74.5 million by the Federal Circuit Court of Appeals.

Old Stone said its petition to the U.S. Supreme Court for review was denied in 2007, and the bulk of the funds received were distributed to the holders of its series B preferred stock as a partial redemption of that series.

Since that time, the company said it has sought to find a partner or a transaction to raise additional funds to pay out the redemption amount owed on the remaining series B preferred stock, as well as to provide funds for the holders of its common stock.

Despite several initiatives, Old Stone said it became clear to its board of directors that a transaction could not be achieved.

At this time, the company estimates that it has no outstanding debt and about $800,000 in cash, which will be available for the holders of the series B preferred stock after payment of dissolution expenses.

The court has appointed Allan Shine of Winograd Shine Land & Finkle, PC as a temporary receiver. He is expected to be appointed as permanent receiver to oversee the distribution of final amounts to the holders of series B preferred stock, to pay any and all other liabilities and obligations of Old Stone and to take actions needed to liquidate the company.

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