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 MINNEAPOLIS, Nov. 18 /PRNewswire/ -- Edina Realty, Inc., together with its parent, Metropolitan Financial Corp. (NYSE: MFC), and its sister company, Equity Title, Inc., today announced a tentative settlement in a lawsuit brought by a class of sellers who challenged the disclosures made when different Edina Realty sales associates represented home buyers and sellers in their sales transactions.
 The lawsuit against Edina Realty challenged the adequacy of the disclosure required by a 1985 Minnesota statute authorizing different sale associates with the same real estate company to represent the buyer and seller in a transaction. Edina Realty made the statutorily-required disclosures, but the plaintiffs claimed that the statutory disclosures were insufficient. The statute was recently amended.
 The settlement provides for commission discounts and stock options in a new publicly held company, as well as cash payment of the class' litigation expenses with any remainder being contributed to a charity to be determined. The class consists of home sellers involved in sales transactions between April 1986 and the Oct. 1, 1993, effective date of the recent statutory amendments.
 "We're pleased with the settlement, which allows us to focus on our future growth and the spin-off of Edina Realty and Equity Title into a publicly held company, while avoiding the time and expense of protracted litigation," said Ron Peltier, president of Edina Realty.
 Jim Fetterly and Gary Gordon of the Minneapolis law firm of Fetterly & Gordon, counsel for the plaintiffs, noted that the settlement was favorable to the plaintiff class. "The agreement in principle reflects an innovative settlement approach that provides a fair recovery for the estimated more than 40,000 members of the seller's class. Its total value is estimated at more than Edina Realty's current net worth, yet the settlement is structured to ensure that it will not jeopardize Edina Realty's financial security or future success. That is especially important since the settlement not only gives the class members a current award, but also the additional opportunity to share in the growth of Edina Realty."
 The settlement has three components. First, each class member will be eligible to receive three one-year coupons good for reductions in commissions on future sales transactions with Edina Realty. The first coupon is valid in year one, the second in year two, and the third in year three following the settlement date. Classmembers whose challenged transactions were for $300,000 or less would be eligible to receive a total of $300 worth of coupons, while classmembers whose houses sold for more than $300,000, would be eligible to receive $450 worth of coupons. The coupons will be transferable, including by sale, but non-cumulative. The potential value of this portion of the settlement is estimated at $13.3 million.
 Second, the settlement calls for an option, valid for 10 years from the settlement date, to purchase stock in a planned public company to be created when Metropolitan Financial Corp. spins off Edina Realty and Equity Title. The options could potentially total approximately 10 percent of the initial stock of the new company and, assuming a 10 percent per year growth rate for the new company, have a possible value of $5.6 million.
 The third component is a payment to the settling plaintiffs of $2.5 million in cash, to be used to cover attorneys fees and litigation expenses (with cash not used for those purposes to be contributed to charity), making the total settlement, including coupons and stock options, potentially worth just over $21 million.
 The settlement is subject to the negotiation and execution of a definitive settlement agreement, which must be approved by Hennepin County District Court Judge Gary Larson.
 -0- 11/18/93
 /CONTACT: David Hakensen of Padilla Speer Beardsley, 612-871-8877, for Edina Realty; or Jim Fetterly or Gary Gordon, of Fettterly & Gordon, 612-333-2003, for the plaintiffs/

CO: Edina Realty, Inc., Metropolitan Financial Corp.; Equity Title Inc. ST: Minnesota IN: SU:

DS -- MN006 -- 5919 11/18/93 10:01 EST
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Publication:PR Newswire
Date:Nov 18, 1993

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