Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, October 25, 1995                   TAG: 9510250077
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: CHARLOTTE                                LENGTH: Medium

BANKS' MERGER CHALLENGED

Several community groups filed a lawsuit Tuesday seeking to overturn First Union Corp. shareholders' approval of a proposed $5.4 billion buyout of New Jersey's biggest bank.

Attorneys for the Boston-based community group Neighborhood Assistance Corporation of America and three other groups filed the suit in Mecklenburg County Superior Court.

NACA opposes the First Union-First Fidelity merger because it charges that First Union's lending policies discriminate against minorities.

The merger, which is expected to close by the end of the year, is one of the largest bank deals in history. It will create a banking company with $128 billion in assets and 1,200 offices from Connecticut to Florida.

The combination must still be approved by bank regulators.

The plaintiffs are seeking a preliminary injunction that would nullify the results of a special shareholders meeting on Oct. 3, when First Union shareholders overwhelmingly approved the merger with First Fidelity Bancorp of Newark, N.J., and Philadelphia.

The defendants in the suit are First Union and three of its top executives, including chairman and chief executive officer Ed Crutchfield.

The suit alleges that Crutchfield conspired with the other bank executives to exclude NACA members from attending the meeting.

``The allegations are groundless,'' responded First Union spokesman Jeep Bryant.

Led by NACA executive director Bruce Marks, the demonstrators were rebuffed in their effort to disrupt the meeting in Charlotte. Marks, who said he owns First Union stock, and the other protesters were kept outside because they were not on the list of shareholders who owned stock on Aug. 22, the cutoff for those eligible to attend the special meeting, said Bryant.

``They had no materials to indicate they were shareholders,'' Bryant said.

The other plaintiffs are the Union Neighborhood Assistance Corp.; the Community Assistance Corporation of America, and the Neighborhood Stabilization Corporation. Like NACA, all three groups also are based in Boston.