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

DATE: FRIDAY, August 26, 1994                   TAG: 9408260045
SECTION: BUSINESS                    PAGE: A7   EDITION: METRO 
SOURCE: ASSOCIATED PRESS
DATELINE: WILLIAMSPORT, PA.                                 LENGTH: Short

STATE BANK CLEARED OF IMPROPRIETY

Three large American banks, including Signet Bank-Virginia, and one Japanese bank have been cleared of impropriety in a $1.5 million loan to a now-defunct Pennsylvania company.

U.S. District Judge Malcolm Muir ruled that two Spanish banks, Banco Urquijo and Banco Natwest Espana, did not receive misinformation about the financial condition of Intershoe Inc. of Millersburg, Pa., a designer, importer and wholesaler of ladies shoes.

The company purchased its inventory primarily from manufacturers in Spain.

The Spanish banks had sued Richmond-based Signet-Virginia, Signet Bank-Maryland, Corestates Bank of Philadelphia and Tokyo Trust Co.

Those banks had extended Intershoe a $40 million line of credit secured by accounts receivable, inventory, cash and foreign line of credit of $75 million.Based on the defendants' favorable opinion of Intershoe, the Spanish banks said they advanced the company $1,450,934 between Nov. 14 and Dec. 20, 1991.

Muir found there was no basis for the misrepresentation allegations and said officials of the Spanish banks were aware that Intershoe had a secured debt of approximately $40 million.

He also ruled there was no evidence that Signet-Maryland, the lead lender in the syndicate, failed to disclose material information.

Muir's 74-page opinion issued this week was the verdict in the 24-day nonjury trial in July that involved witnesses from Spain and hundreds of exhibits. The verdict gives the defendants the right to recover their costs of the lawsuit.

by CNB