PWBA Press Release

PENSION AND WELFARE BENEFITS ADMINISTRATION USDL: 00-29

WACHOVIA NATIONAL BANK AND FORMER MEDICAL EXECUTIVE TO RESTORE $42 MILLION TO PENSION PLAN

Wachovia National Bank, N.A. and the former president and chief executive officer of Charter Medical Corp. agreed to restore $42 million to the corporation’s employee stock ownership plan (ESOP) under a settlement agreement with the U.S. Department of Labor. Wachovia entered into the agreement as the successor to South Carolina National Bank.

Under the settlement, Wachovia will pay $30 million to the ESOP, which is now known as the Magellan Health Services, Inc. ESOP. William A. Fickling, Jr., the former president and C.E.O. of Charter Medical, also will pay another $12 million to the plan. Money restored to the plan will be allocated to past and present participants and beneficiaries on a pro-rata basis.

Under a previous Nov. 13, 1996 consent order, South Carolina National Bank (SCNB), had been permanently removed from its position with the ESOP and replaced with an independent trustee.

Charter Corporation emerged from reorganization bankruptcy in July 1992. The ESOP was created in January 1988 and covered approximately 13,000 participants in 1990.

The Labor Department lawsuit alleged that SCNB caused the ESOP to overpay for 11,853,569 shares of stock in Charter Medical Corporation from William A. Fickling, Jr., and related parties, including Neva L. Fickling, William A. Fickling III, Jane F. Skinner, Julia C. Fickling, Roy H. Fickling, Claudia F. Fickling, Katherine M. Wright, Virginia M. Rabun, W&J Capital Co. Ltd., J&R Capital Co. Ltd. and various trusts.

SCNB, the ESOP trustee, allegedly breached its fiduciary obligations by relying on an unreliable valuation prepared by Interstate/Johnson Lane Corporation.

The settlement agreement was entered on June 6 in federal district court in Birmingham, Ala.

This case resulted from an investigation conducted by the department’s Pension and Welfare Benefits Administration into alleged violations of the Employee Retirement Income Security Act.

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(Herman v. South Carolina National Bank)
Civil Action No. 92-H-2858-NE

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