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 PITTSBURGH, Dec. 1 /PRNewswire/ -- Mellon Bank Corporation (NYSE: MEL) today was granted an injunction against Smith Barney Shearson Inc., requiring Smith Barney to abide by the non-compete and other obligations to Mellon resulting from Mellon's acquisition of The Boston Company.
 Mellon filed a lawsuit against Smith Barney in September, asserting that Smith Barney, which purchased Shearson Lehman Brothers' mutual fund and brokerage businesses in 1993, willfully violated the terms of the contract under which Mellon purchased The Boston Company. Mellon asserted that the contract expressly protects its provision of administration services to various mutual funds.
 Judge Alan N. Bloch, district judge for the U.S. District Court for the Western District of Pennsylvania, granted injunctive relief to Mellon, prohibiting Smith Barney from engaging in a variety of activities that Mellon claimed were illegal and detrimental to its mutual fund administration business.
 "This is a major victory," said Frank V. Cahouet, chairman, president and chief executive officer of Mellon Bank Corporation. "We couldn't be more pleased that the court has recognized the contractual protections that Mellon obtained in purchasing The Boston Company. We are gratified that the court acknowledged the seriousness of our complaint and validated our position."
 The court found that the contractual protections in the stock purchase agreement under which Mellon purchased The Boston Company are "clear and unambiguous."
 "The mutual fund administration business is important to Mellon's overall strategy, and we were committed to protecting it when it became clear that Smith Barney was not honoring the business contract. We are pleased to have won so decisive a victory on behalf of our shareholders, and that our ability to participate in the growth of the mutual fund business has been protected."
 The injunction granted to Mellon prevents Smith Barney, for a period of seven years, from competing with Mellon in providing administration services to funds in the Smith Barney Shearson family, other than Smith Barney funds that existed prior to Smith Barney's March 12, 1993, agreement to purchase Shearson Lehman Brothers' mutual fund and brokerage businesses. The injunction covers all new funds created or underwritten by Smith Barney, however named, after March 12, 1993, and obligates Smith Barney to recommend Mellon as the provider of administration services.
 Specifically, the injunction:
 -- Prevents Smith Barney, for a period of seven years until May 21, 2000, from providing administration services to any mutual fund:
 -- Which is the result of a merger of or other reorganization involving an existing Shearson Lehman fund and an existing Smith Barney Fund;
 -- Which is a clone of or substantially similar to an existing Shearson Lehman fund; or
 -- Which is a new fund created, sponsored or underwritten by Smith Barney after March 12, 1993.
 -- Orders Smith Barney, for a seven-year period beginning May 21, 1993, to recommend, subject to its fiduciary obligations, to the boards of directors of each such fund that The Boston Company should provide administration services to each such fund;
 -- Orders Smith Barney, for a seven-year period beginning May 21, 1993, to use reasonable efforts, subject to its fiduciary obligations, to ensure that The Boston Company obtains an opportunity to submit a written bid to provide administrative services to any mutual fund requesting that another entity provide administration services;
 -- Orders Smith Barney, for a seven-year period beginning May 21, 1993, to recommend, subject to its fiduciary obligations, to approximately 50 percent of the boards of directors of such funds that a nominee of Mellon should be elected to the board of each such fund.
 With assets of approximately $35 billion, Mellon Bank Corporation is a major superregional bank holding company. Through its subsidiaries, it provides wholesale, middle market and retail banking, as well as numerous fee-based service products, including trust and investment, cash management and mortgage banking.
 -0- 12/1/93
 /CONTACT: analysts, Charles M. Johnston, 412-234-5601; or media, Thomas W. Butch, 412-234-6436, both of Mellon Bank/

CO: Mellon Bank Corporation; Smith Barney Shearson Inc.; The Boston
 Company ST: Pennsylvania IN: FIN SU:

CD -- PG015 -- 9505 12/01/93 17:31 EST
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Publication:PR Newswire
Date:Dec 1, 1993

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