Appeal from the Order of the Department of Banking in the case of Application of Daniel M. Tabas Under Section 112 of the Banking Code of 1965, as amended.
Morris R. Brooke, with him Lewis H. Van Dusen Jr., and Thomas J. Leach, Drinker, Biddle & Reath, for petitioner.
Elisabeth S. Shuster, Deputy Attorney General, with her, John E. Nanorta and Bonnie Jean McRobbie, Assistant Attorneys General, Allen C. Warshaw, Deputy Attorney General, and Edward G. Biester, Jr., Attorney General, for respondent.
President Judge Crumlish and Judges Wilkinson, Jr., Mencer, Blatt, Craig, MacPhail and Williams, Jr., Judge Rogers did not participate. Opinion by President Judge Crumlish.
[ 54 Pa. Commw. Page 519]
Daniel M. Tabas appeals a Department of Banking (Department) decision which conditioned his ownership of shares of Lincoln National Company (Lincoln). We affirm in part and reverse in part.
In November, 1977, at the request of Norman D. Denny (Chairman of Lincoln National Company), the Department commenced proceedings against Tabas under Section 112 of the Banking Code of 1965, Act of November 30, 1965, P.L. 847, as amended, 7 P.S. § 112. The Section 112 proceeding was based on a discovery
[ 54 Pa. Commw. Page 520]
that Tabas, together with his wife and son, held a 14.35% stock interest in Lincoln, a holding company for Lincoln National Bank.*fn1
Section 112(b) of the Code, 7 P.S. § 112(b), provides:
[I]t shall be unlawful, without the prior written approval, of the department pursuant to this section, for any person to acquire, or to make a proposal to acquire, shares of an institution or shares of a corporation which controls an institution if the aggregate number of shares held after such acquisition would total more than ten percent of the outstanding shares of such institution or corporation, whether or not any prior acquisition had been approved by the department pursuant to this section. (Emphasis added.)
For purposes of calculating a person's percentage "ownership" in a banking institution, Section 112(a)(i) specifically includes stock "ownership by a spouse or member of the family of such person. . . ." 7 P.S. § 112(a)(i).
Realizing that he had failed to procure Departmental approval for his 14.35% interest in Lincoln, Tabas filed an "after the fact" Section 112 application on January 20, 1978, requesting continued ...