PHILADELPHIA, March 3 (UPI) -- Philadelphia-area Sovereign Bancorp Inc. criticized a court for ruling that its directors could be removed without cause.
A U.S. district court judge in New York ruled in a case brought by Sovereign's largest shareholder, San Diego-based Relational Investors LLC, that Pennsylvania law in effect when the bank was incorporated allowed for removal of directors without cause.
"Sovereign will seek the swiftest possible review by the United States Court of Appeals for the Second Circuit," the bank said in a statement.
Relational, which holds 8.4 percent of Sovereign, has been fighting Sovereign's directors and top management to gain board representation and block certain mergers and acquisitions it claims serve only to insulate the board and top managers from shareholders.
Relational also sued to block legislation signed by Pennsylvania Gov. Ed Rendell last month that would aid Sovereign in completing those mergers and acquisitions, the Philadelphia Inquirer reported.
Relational Investors' founder, Ralph V. Whitworth, said the Pennsylvania bill was "passed at Sovereign's urging under the cover of darkness" and "impaired the rights of Sovereign's approximately 87,000 shareholders."
