Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post
Newsgroups: americast.wpost
From: americast-post@AmeriCast.Com
Organization: American Cybercasting
Approved: americast-post@AmeriCast.com
Subject: Jacobs Drops Lawsuit Against Bank; Action by Orioles Owner Clears Way for
Date: Fri, 13 Nov 92 04:39:11 EST
Message-ID: <43.1992Nov13.043912@AmeriCast.com>

Jacobs Drops Lawsuit Against Bank; Action by Orioles Owner Clears
Way for Negotiations, Sources Say<By Mark Potts=Washington Post
Staff Writer= Baltimore Orioles owner Eli S. Jacobs yesterday
withdrew a lawsuit against Mercantile Safe Deposit and Trust Co.,
a possible indication that his legal battle with the Baltimore
bank over the restructuring of Jacobs's finances may be heading
toward a settlement.

 Sources said Jacobs withdrew the suit to clear the way for new
talks with Mercantile over the renegotiation of a $21.3 million
loan that the bank has sued Jacobs to collect.

 The loan is an important element in Jacobs's restructuring ef-
forts. He had alleged in his suit that Mercantile had taken the
action against him in an effort to pressure him to grant the bank
more favorable terms than other lenders in the restructuring.

 A spokesman for the New York-based investor declined to comment.

 An attorney for Mercantile did not return a telephone call seek-
ing comment late yesterday.

 Jacobs has spent much of this year working with his lenders to
refinance loans he took out to back a series of debt-financed ac-
quisitions in the 1980s. But his efforts to restructure his hold-
ings hit a roadblock in August when Mercantile said Jacobs had
failed to make payments on the $21.3 million loan, and filed
suit.

 The bank also got a court order freezing three Jacobs bank ac-
counts in New York, and won a ruling from a Baltimore judge
diverting to it any money paid to Jacobs by the Orioles.  Jacobs
has said repeatedly the dispute does not endanger his ownership
of the baseball team.

 Jacobs, in turn, sued Mercantile for $25 million, alleging that
the bank had acted illegally in moving to deny him access to the
New York accounts.

 The two sides agreed several weeks ago to put the legal actions
on hold until December to provide breathing room to negotiate.

 Mercantile is not the only bank in a legal battle with Jacobs.
Two others - Berkshire Bank of New York and Manufacturers and
Traders Trust Co. of New York - also have sued Jacobs, claiming
he defaulted on $4.4 million in loans.

 Jacobs has said that the legal actions are related to his ef-
forts to restructure his secretive fortune, which sources said
last year was worth about $500 million and is believed to consist
of investments in a wide variety of companies, real estate and
other vehicles.

 Mercantile is one of Jacobs's principal banks.  In addition to
the $21.3 million loan, it provided Jacobs with $47.5 million of
the $70 million he used to purchase the Orioles in 1989.

 Mercantile Chairman H. Furlong Baldwin briefly served on the
Orioles' board, and the bank also has financed other transactions
for Jacobs.<

 Special correspondent James Pierpoint contributed to this report
from Baltimore.<02:32 11-13C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

For more information, send-email to American Cybercasting Cor-
poration (usa@AmeriCast.COM)