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TRUST BENEFICIARY WINS NEAR $100 MILLION JUDGMENT AGAINST MELLON BANK

TRUST BENEFICIARY WINS NEAR $100 MILLION JUDGMENT AGAINST MELLON BANK
 PHILADELPHIA, Aug. 7 /PRNewswire/ -- A Federal Court in Philadelphia today awarded a trust beneficiary, John B. Upp and the class represented by him compensatory damages of as much as $56 million plus interest going back to 1981. The award was to repay trust beneficiaries and others so-called "sweep fees," charges made by Mellon Bank (NYSE: MEL) and its predecessor Girard Bank for transferring dividends, interest and other cash receipts into money market accounts. With interest added, the verdict may well exceed $100 million dollars. Additionally, Upp, who paid approximately $4,000 in sweep fees, was awarded $75,000 in punitive damages, in addition to his compensatory damages. Upp did not testify at trial.
 The case was tried before the Honorable Marvin Katz, by Oliver C. Burt III, a senior partner at the Haverford, Penn. law firm of Greenfield & Chimicles, representing the plaintiff class. Burt was assisted by a team consisting of Mark C. Rifkin, Miles Rittmaster, Michael D. Gottsch and several legal assistants. Defendant Mellon Bank was represented by Walter T. McGough and W. Thomas McCough, Jr. of the law firm of Reed, Smith, Shaw and McClay of Pittsburgh and Philadelphia, Penn.
 Burt commented that "We are gratified by the opinion to pay fair fees and costs for the services provided by the banks that administer their trusts and estates."
 Richard D. Greenfield, a senior partner of Greenfield & Chimicles and an acknowledged specialist in bank litigation commented: "Obviously, we are pleased with this important victory for victims of bank overcharges. This case is a clarion call to banks everywhere to reform their egregious practices that have long victimized their customers and others who have to deal with these institutions. We anticipate bringing many more similar suits."
 Among the findings of fact and conclusions of law issued by the court, Judge Katz found that: "The bank charges a standard fee for managing then 'double dips' to charge an unreasonable sweep fee for its services...Mellon knows it is 'double dipping' and intends to do so to meet revenue goals..by charging excessive sweep fees, Mellon is simply feathering its own nest at the expense of funds it holds in trust." Judge Katz further characterized the bank's practice as a "Christmas Club" for its own benefit.
 Judge Katz found, among other things that the sweeping fees generated almost $56 million dollars since 1981 and well over $7 million in 1991 alone. He further found that the actual cost of such functions were nominal, reflecting an operating margin of more than 7,000 percent, and that "the record shows no rational basis that the sweep fees charged were reasonable."
 In awarding $75,000 in punitive damages to Upp, Judge Katz said: "Punitive damages are particularly appropriate because Mellon's most significant rationale for charging sweep fees, i.e., the bank was 'losing' interest on trust funds which do not even belong to it, is outrageous. The bank's stated intention to 'double dip' shows a bad motive for the charges."
 -0- 8/7/92
 /CONTACT: C. Oliver Burt III, 215-649-3900, or Richard D. Greenfield, 518-327-3407, or 215-642-8500, both of Greenfield & Chimicles/
 (MEL) CO: Mellon Bank ST: Pennsylvania IN: FIN SU:


LD-TM -- NY055 -- 8243 08/07/92 20:06 EDT
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Date:Aug 7, 1992
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