NEW YORK — Three Leslie Fay Cos. stockholders, in an effort to protect their investments in the company, have asked a bankruptcy judge, here, to set aside a federal regulation and allow them to sell their shares.

The shareholders, all members of the official committee of equity security holders in Leslie Fay’s Chapter 11 case, are normally barred from selling their stock because they may possess inside information and therefore have an advantage over the general public.

The three committee members, two institutional holders — American National Bank & Trust Co. of Chicago and Dimensional Fund Advisers Inc. — one private shareholder, Salvatore M. Salibello, charge in court filings that the rule barring them from selling their issues is unfair and should be lifted in this matter.

“An individual member should not have to bear the risk that his or her stock will lose substantially all of its market value without having the ability to have that stock sold at some point during the decline,” the committee said.

The three do not say they foresee a further big drop in the company’s stock, but rather point out that they want to protect themselves in the event such a drop should occur. Leslie Fay stock closed Wednesday on the New York Stock Exchange at 3, unchanged. The stock took a sharp drop over a year ago on Feb. 1, 1993, when the company made its first disclosure of the massive accounting irregularities that hid operating losses. On that day, the stock fell 4 5/8 to close at 7 3/8. On April 3, 1993, the day the company filed Chapter 11, the stock closed at 3. In the 52 weeks before that date, the stock had traded as high as 20 1/4.

In its motion, the three committee members suggest that they be allowed to sell their stock, if they choose, through a blind trust to eliminate any appearance of impropriety. In a blind trust, a trustee is given full control over the finances of a person or institution who are not informed of any dealings.

If Bankruptcy Judge Tina L. Brozman denies their motion to lift the ban on selling their shares, the three shareholders said in their court filing they will consider resigning their posts.

The resignations “of certain qualified and sophisticated investors” would be “to the detriment of the equity committee’s constituents.”

Brozman will take up the committee’s motion Aug. 8.

— Fairchild News Service

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