ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, January 8, 1996 TAG: 9601110009
SECTION: MONEY PAGE: 6 EDITION: METRO
COLUMN: Money Matters
SOURCE: MAG POFF
Q: I held stock in the old Dominion Bankshares Corp. and qualified for the settlement reached in the stockholder suit. In your column several months ago, you quoted someone as saying that the claims would be submitted to the court around the first of the year, but I haven't received any communication from the lawyers. What is the status of this suit?
A: As is common with this type of lawsuit, the settlement has been delayed.
Plaintiffs in the class-action suit alleged they were misled about Roanoke-based Dominion's financial condition at the time they bought the stock. First Union Corp., which bought Dominion Bankshares in 1993, denied the allegations but agreed to settle the claims of some people who had bought Dominion stock.
The claim period covers stock purchased between March 6, 1989, and July 17, 1990. Lawyers have said the fund available for claimants totals about $3 million after payment of legal and administrative fees.
People who bought stock between those dates originally had until May 1, 1995, to file their claims. The deadline was extended to July 9, 1995, because of complications in determining which Dominion employees were entitled to file claims. Dominion had four employee investment and pension plans that had bought company stock.
The court appointed Heffler, Radetich and Saitta, a Philadelphia firm of certified public accountants, to study and report on the claims. The firm received 3,019 claims by the July 9 deadline.
Michael Bancroft, who is handling the matter for Heffler, said the firm has completed its review of the claims. Many had deficiencies and were referred back to the claimants. Some people failed to file documentary evidence of the claim as required. Other claims were rejected because the stock purchase did not fall between the specified dates.
Bancroft said the firm is still receiving responses from stockholders whose claims were questioned or rejected. These answers are in the process of being reviewed.
When that work is done, the final report will be written. The report must include a tabulation of the amount of money each claimant would receive as a pro rata share of the funds available.
Bancroft said he hopes this can be completed by the end of the first quarter, which would be late March. The report then must go to the court, which will review the work and authorize payments.
Tracking penny stocks
Q: In the late 1980s, I purchased three penny stocks. Within a few months they devalued to the point where I took possession of the certificates instead of paying an annual account fee to a broker. Because these stocks were never listed in our local paper, I've lost track of them.
Could you please assist me in determining if these stocks still trade and what value, if any, they might have? Also, considering the time that has passed, can I still write them off my taxes if they have no value?
The three stocks in question are American Leisure Entertainment Corp., Automated Scanning Inc. and Radon Testing Corp. of America.
A: Peter Milward, manager of the Roanoke office of J.C. Bradford & Co., said American Leisure Entertainment and Automated Scanning have disappeared from the trading boards. They do not exist, and their stocks have no value.
Radon Testing still trades and had a recent value of 6 cents a share. If you want more information about the company, Milward said, you can call it at (914) 591-4304. You also can go back to the broker who bought the stock for you and ask him or her to sell it.
Milward said brokers maintain a service for their clients through which you can verify that stocks are worthless. He said the brokers buy the worthless stock back from clients for $1, and this transaction can be reported to the Internal Revenue Service to show the loss.
Penny stocks are inexpensive, but they are not cheap, because you take a very big risk. A better route is to invest in companies you know or about which you have research material. If you cannot afford reputable stocks, you should buy into a mutual fund instead.
LENGTH: Medium: 77 linesby CNB