Former CEO Wade expands suit vs. Citizens Union Bank

-A A +A

by Lisa King

Defendants, claims added; jury trial scheduled for spring

Former CEO Billie Wade’s lawsuit against Citizens Union Bank is headed for a jury trial next spring – with some new defendants and claims that were added this week.

Wade, who had led CUB since 1991, left the bank in March 2010 amid state and federal reviews of the bank’s lending practices, and in July 2010 filed suit, charging wrongful termination, that the bank lied about his departure, cost him income and discriminated against him.

Wade’s suit originally named the bank, its holding company, Citizens Union Bancorp, former board chairman Dr. Edward Hayes, the consulting company Chartwell Capitol LTD and its officials, Charles J. Thayer and Denise VanSteenlandt.

But on Monday, Wade in an amended complaint, added two more defendants: Lea M. Anderson of Shelbyville and Steven Barker of Louisville, both of whom are principal shareholders and board members of Bancorp.

According to court documents, Wade said Anderson and Barker, along with Hayes, retaliated against him in January 2011 by conspiring to remove him from his position as chairman of the board of directors for First Farmers Bank, which is also owned by Citizens Union Bancorp, causing him “humiliation and embarrassment.”

Wade also alleges in his amended suit that CUB, Bancorp and Hayes refused to pay him the salary he was owed because they feared it would constitute a “golden parachute” payment.

Circuit Court Judge Charles Hickman scheduled jury trial proceedings, at Wade’s request, with a pre-trial conference set for March 7 and a jury trial scheduled for April 20, 2012.

CUB’s attorney, J. Kendrick Wells, with the firm Frost Brown Todd of Louisville, did not respond to repeated phone messages seeking comment.

David Bowling, president of CUB Bank, limited what he would say about the suit.

“As it relates to the lawsuit, I would say, we certainly plan to defend our position, and we’ll just have to see how that plays out,” he said.

Wade’s attorney Lawrence Zielke of Louisville, did not return calls to the newspaper, but last summer, he said Wade’s complaints stem from the vindictive way he had been treated by the bank for which he had been CEO for nearly 20 years.

Wade charged in his original suit that the bank breached his contract, lied in public statements that he had retired, defamed him, cost him income and caused him to take on debt.  He says he was fired without cause and that bank officials then lied about it and said he had retired, even issuing a press release to that effect.

The suit also alleges age discrimination, breech of duty of good faith and fair dealing, false light and tortuous interference with his contract.

Now he claims that Hayes, Anderson and Barker control the First Farmers Bank Board and that they coerced other board members to participate in the retaliation by “removing him from the chairman’s position.”

His amendment about the “golden parachute” refers to an agreement between a company and an employee, usually an upper executive, specifying that the employee would receive certain significant benefits if employment were to be terminated.

The suit says that CUB, Bancorp and Hayes requested the Federal Deposit Insurance Corporation’s permission to make such a payment to Wade but that officials didn’t provide the FDIC with sufficient information for approval and were denied.

The FDIC allows reconsideration, but Wade’s suit says that Bancorp officials did not respond in a “timely manner” and then didn’t alert Wade to the rejection until after the reconsideration period had run out.

The suit claims that CUB, Bancorp and Hayes “intended to rely upon the FDIC’s negative determination to bar Wade’s claims in this civil lawsuit.”

That process, Wade claims in the suit, caused him to go to great expense and effort to have the FDIC’s decision reversed.

In January 2010, CUB came under scrutiny when the Kentucky Department of Financial Institutions and the FDIC filed a “consent order” against the bank in connection with a series of what the bank called “problem loans.”

News of that investigation surfaced in March 2010. At that time, Charles A. Vice, commissioner of the Department of Financial Institutions, an 18-year bank examiner for the FDIC, told The Sentinel-Newsthat such orders are a joint action between the FDIC and his department designed to help banks avoid getting into serious financial difficulty.

Vice was unavailable for comment Thursday.

Said Bowling:  “We are continuing to work very closely with the state and the FDIC and are making good progress on resolving a number of our problem loans, and we feel very optimistic about the future of where we are headed.”