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High court sides with Fifth Third employees in dispute

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 The U.S. Supreme Court on Wednesday sided with bank employees in a lawsuit against Fifth Third Bancorp that accused management of irresponsibly investing employee retirement money in the bank's then-failing stock.

The unanimous ruling came in a case involving a retirement fund invested primarily in the bank's stock.

The court considered whether those in charge of investing in the fund have the freedom or the duty to direct investment money elsewhere when they have reason to believe the stock price is inflated.

The employees said management knew that borrowers increasingly were defaulting on risky, subprime loans, but concealed that information or misled investors.

The Cincinnati-based banking company continued to invest in the stock-ownership fund even when the problems came to light and the share price plummeted.

The suit asserted that those actions violated management's duty to take good care of the employees' retirement money.

The 6th U.S. Circuit Court of Appeals allowed the case to proceed. The justices ordered the appeals court to re-examine the case in light of Wednesday's ruling, although they agreed with the appellate judges that the actions of bank management do not merit special protection when dealing with a bank-stock fund.

The name of the company stems from the union of two banks, the Third National Bank and the Fifth National Bank.

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  1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

  2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

  3. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  4. If you only knew....

  5. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

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