Philly Kerfluffle May Soon Be Over

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A “bitter” lawsuit involving several former Philadelphia Stock Exchange owners, PHLX board members, Merrill Lynch, Citadel and others may soon be resolved. Ex-seatholder Chuck Ginsburg alleges that he and older people in the possession of seats weren’t consulted before a deal to sell Archipelago for $50 million in 2004 was rejected because CEO Meyer “Sandy” Frucher preferred to pursue a deal that would give him a big piece of equity.
Ginsburg claims that PHLX forfeited 90% of it equity when it accepted $7.5 million a piece from Merrill, Citadel, UBS, Credit Suisse, noting that each $7.5 million stake is now worth $84.2 million. The lawsuit also argues that an offer from Timberhill, valuing PHLX equity higher—“166%”—, was dismissed. Ginsburg et al believe they were cheated out on stock play they could have tapped with an Archipelago acquisition of PHLX. Yes, there is a Philadelphia Stock Exchange.
Earlier: Wall Street, PA
Philly Exchange Deal in the Works [NYP]

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