United Press International, April 3, 1972
DETROIT (UPI) - James T. Barnes & Co., a Detroit-based mortgage investment firm, announced today it had options to purchase controlling interest in the financially-troubled Bank of the Commonwealth from the Chase Manhattan Bank of New York. James T. Barnes Jr., president of the mortgage firm, said the Barnes family had agreed to purchase 1,780,435 shares of the common stock of Commonwealth from Chase Manhattan. The New York bank acquired the stock more than a year ago in public auction after it had foreclosed on two notes totaling $20 million owed the bank by the prior controlling group interest, Donald H. Parsons [former chairman of the Bank of the Commonwealth of Detroit and owner of a Pittsburgh hockey team, the Penguins, and the Ford and Dime Buildings in Detroit] and his associates. [Parsons and his group, mostly University of Michigan alumni in their mid-thirties, took over Bank of the Commonwealth in a proxy fight in 1964.] The Barnes family also said it had arranged to purchase the 65,000 shares of preferred stock held by Chase Manhattan, as well as an additional 100,000 shares of preferred stock held by two California real estate men, Donald Kaufman and Eli Broad.
The combined total gives the Barnes family 53 per cent of the preferred stock and 39 per cent of the common stock, effective control of Commonwealth, Detroit's fourth largest bank. However, ultimate control remains with the Federal Deposit Insurance Corp. (FDIC) which was given broad powers in agreeing to loan Commonwealth $60 million to strengthen the bank's capital. The FDIC loans, the largest of its type ever extended, was approved by the stockholders last month.
The purchase price was not disclosed, but Commonwealth stock, traded over-the-counter, closed at 7% on the last trading day, Thursday. The acquisition of the Commonwealth stock by the Barnes family, which last fall bought 85 per cent of the Peoples Bank of Port Huron, another ill-fated Parson's venture, was praised by Robert P. Briggs, commission of the Michigan Financial Institutions Bureau. He called it "good news to all who have worked to bring about the reorganization of the bank."
John E. Thompson, president of Commonwealth, praised Chase Manhattan for its role in strengthening the bank but said it was "in the best interest of everyone" that a local family now has control. Barnes told a news conference that John A. Hopper, a Chase Manhattan vice president sent in as chairman of the Commonwealth, would remain as chairman "for as long a period as possible consistent with his intention at a later date" to return to New York.
United Press International, April 3, 1972
DETROIT (UPI) - James T. Barnes & Co., a Detroit-based mortgage investment firm, announced today it had options to purchase controlling interest in the financially-troubled Bank of the Commonwealth from the Chase Manhattan Bank of New York. James T. Barnes Jr., president of the mortgage firm, said the Barnes family had agreed to purchase 1,780,435 shares of the common stock of Commonwealth from Chase Manhattan. The New York bank acquired the stock more than a year ago in public auction after it had foreclosed on two notes totaling $20 million owed the bank by the prior controlling group interest, Donald H. Parsons [former chairman of the Bank of the Commonwealth of Detroit and owner of a Pittsburgh hockey team, the Penguins, and the Ford and Dime Buildings in Detroit] and his associates. [Parsons and his group, mostly University of Michigan alumni in their mid-thirties, took over Bank of the Commonwealth in a proxy fight in 1964.] The Barnes family also said it had arranged to purchase the 65,000 shares of preferred stock held by Chase Manhattan, as well as an additional 100,000 shares of preferred stock held by two California real estate men, Donald Kaufman and Eli Broad.
The combined total gives the Barnes family 53 per cent of the preferred stock and 39 per cent of the common stock, effective control of Commonwealth, Detroit's fourth largest bank. However, ultimate control remains with the Federal Deposit Insurance Corp. (FDIC) which was given broad powers in agreeing to loan Commonwealth $60 million to strengthen the bank's capital. The FDIC loans, the largest of its type ever extended, was approved by the stockholders last month.
The purchase price was not disclosed, but Commonwealth stock, traded over-the-counter, closed at 7% on the last trading day, Thursday. The acquisition of the Commonwealth stock by the Barnes family, which last fall bought 85 per cent of the Peoples Bank of Port Huron, another ill-fated Parson's venture, was praised by Robert P. Briggs, commission of the Michigan Financial Institutions Bureau. He called it "good news to all who have worked to bring about the reorganization of the bank."
John E. Thompson, president of Commonwealth, praised Chase Manhattan for its role in strengthening the bank but said it was "in the best interest of everyone" that a local family now has control. Barnes told a news conference that John A. Hopper, a Chase Manhattan vice president sent in as chairman of the Commonwealth, would remain as chairman "for as long a period as possible consistent with his intention at a later date" to return to New York.
WISCONSIN STATE JOURNAL,
SATURDAY, FEBRUARY 1, 1975
SATURDAY, FEBRUARY 1, 1975
DETROIT (AP) - A Saudi Arabian financier has reached agreement with the Bank of the Commonwealth, Michigan's sixth largest bank, to buy 40 per cent of its stock. The agreement, announced Friday, must be endorsed by the Federal Deposit Insurance Corp., which holds a $35-million note on the bank.One segment of the Barnes family stock in Michigan's Commonwealth Bank had previously been owned by Chase Manhattan Bank, a member of the New York Federal Reserve, whose interest had been derived through foreclosure of loans made to Donald H. Parsons.
Ghaith Pharaon said he agreed to purchase most of the Commonwealth stock now held by the James T. Barnes family. Arab sources said Pharaon, 34, has close ties, to the Saudi Arabian ruling family. He attended the Harvard Business School and is a director of the Jezirah Bank of Jedda.
The other segment was purchased by the Barnes family from Detroit real estate men, Kaufman and Broad, creators of the first publicly traded (NYSE) home-building corporation. Thus, we can surmise the Federal Reserve was well aware in 1975 that a Saudi citizen was approved to controlling shares of the Commonwealth Bank in Detroit.
He was also happy, along with Khaled bin Mahfouz and John Connally, in 1976 to invest in the Main Bank of Houston, conveniently located in the historic Humble Oil Building on Main Street, which had become vacant after Humble Oil revealed its ownership by Exxon and moved into its new building a few blocks away.
It was not until a year later the Saudis' investments in American banks became an appalling crime when they began to consider buying bank stock from Jimmy Carter official Bert Lance.
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| Associated Press - December 1977 |
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