AKRON, Ohio, July 20, 2011 /PRNewswire/ -- FirstMerit Corporation (Nasdaq: FMER) and Matthew L. Fornshell, in his capacity as Receiver for Joanne and Alan Schneider, today announced a settlement of Mr. Fornshell's lawsuit against FirstMerit Bank, N.A. The lawsuit relates to the collapse of an alleged Ponzi scheme orchestrated by the Schneiders. As part of the scheme, the Schneiders illegally sold investors promissory notes guaranteeing annual interest as high as 18%. Following an investigation by the Ohio Division of Securities, and the subsequent collapse of the Schneider's scheme, Mr. Fornshell was appointed Receiver for the Schneiders and the companies they owned. Mr. Fornshell's lawsuit against FirstMerit Bank, which was commenced in the Court of Common Pleas of Cuyahoga County, Ohio, in May 2006, arises out of Alan Schneider's business checking account at the bank, into which investors' checks were deposited and from which certain investors received payments.
The settlement announced today provides that FirstMerit Bank will cause to be paid to the Receiver a fixed amount of $10.5 million, which is to be distributed to the Schneider investors pursuant to the terms of the Settlement Agreement and further order of the Court. Of the $10.5 million settlement payment, approximately $9.9 million will be covered by FirstMerit's insurer, and FirstMerit's contribution amounts to approximately $0.6 million. The Parties have vigorously litigated the claims asserted by Mr. Fornshell, and FirstMerit Bank's agreement to settle those claims is not an admission of any liability or wrongdoing.
In consideration of the $10.5 million payment, the Receiver has agreed to dismiss the litigation.
Mr. Fornshell, an attorney at Schottenstein Zox & Dunn Co., LPA, said, "We are pleased that we have been able to recover some of the losses suffered by the victims of the Schneiders' illegal conduct." Mr. Fornshell was represented by Joshua R. Cohen and James B. Rosenthal of Cohen Rosenthal & Kramer LLP, and by Jonathon M. Yarger of Yarger Radel & Pentz, LLC.
FirstMerit Corporation Media Contact: Rob Townsend Phone: 330.384.7075 E-mail: email@example.com
Matthew L. Fornshell, Receiver Phone: 614.462.1061 E-mail: firstname.lastname@example.org
SOURCE FirstMerit Corporation