A lawsuit between two Virginia banks has turned into a merger agreement.
Monarch Bank has struck a deal to acquire mortgage-related assets and a Maryland office from Resource Bank, according to a joint announcement today.
Resource, a subsidiary of Fulton Financial Corp., had filed a lawsuit against Monarch, a subsidiary of Monarch Financial Holdings Inc., alleging that its top two executives breached their non-solicitation agreements and took more than 70 employees with them over to Monarch. Departing employees were accused of taking confidential documents with them.
“This is simply people who were not going to remain at Resource; they were going to go elsewhere and they talked to a number of other possible employers and they ended up liking Monarch and have come with us,” Monarch attorney Robert W. McFarland told MortgageDaily.com in June. Other new employees who came from Resource and “may have inadvertently taken documents or things,” those items were returned as soon as Monarch learned about them.
In addition to the lawsuit against Monarch, the two former top executives of Resource sued that company, alleging breach of the non-solicitation clause in their employment contracts and seeking back pay, Resource’s attorney, said at the time.
“Both Banks and all individuals involved in the pending litigation have also reached a settlement in order to avoid further expense, inconvenience and delay, and to dispose of expensive, burdensome and protracted litigation related to the recent hiring of mortgage personnel and compensation owed,” today’s announcement said.
“We’re happy to have been able to resolve this matter outside of the courtroom,” Monarch Bank’s President and Chief Executive Officer William F. Rountree Jr. said in today’s announcement.
Related:
Banks Litigate Employee Exodus
A Virginia bank that lost 79 of its mortgage division employees to a competing bank — including an executive vice president and the chief executive, failed to obtain a temporary injunction against that bank. But it is vowing to pursue a multi-count complaint against the competitor anyway.
