Advanta Says FleetBoston Lawsuit Lacks Merit
Chris Frankie
02/05/01 - 02:44 PM EST
Advanta(ADVNB Quote) said the lawsuit filed by
FleetBoston(FBF Quote) on Friday to block the company's proposed sale of its mortgage business to a unit of
J.P. Morgan Chase (JPM Quote) is the "latest tactic" used by Fleet in the ongoing litigation between the financial services concerns.
FleetBoston said it
wants the transaction blocked unless Chase assumes the alleged $140 million obligation Advanta has to Fleet.
FleetBoston contends that the sale of Advanta's assets meets a provision of its 1998 agreement to buy Advanta's credit card business. FleetBoston said that the buyer of "substantially all" of the rest of Advanta's assets is responsible for any remaining obligations tied to the transaction.
"What they are basically alleging is that in selling our mortgage business to Chase we are selling substantially all of our assets," a spokeswoman for Advanta said. "That is really without merit. We're selling about 32% of the assets of Advanta. We don't really believe their latest tactic has merit. We believe it is just that, a litigation tactic trying to gain some leverage in the ongoing litigation we have with them."
Shares of Advanta fell 31 cents, or 2.6%, to $12 recently on the
Nasdaq, while FleetBoston was up 10 cents, or 0.2%, to $42.09 in
New York Stock Exchange trading.
