Three of the co-founders of CertusBank, who were fired earlier this month after investors raised concerns over spending, have filed a federal lawsuit protesting their dismissals.
Milton Jones, Walter Davis and Angela Webb, who are former Bank of America and Wachovia executives, claim that investors made a calculated move to spread false and defamatory information.
Earlier this year, a New York hedge fund manager distributed letters to shareholders in the Greenville, S.C., bank claiming the executives improperly spent money on corporate condos, private jet flights and Carolina Panthers tickets, among other items.
The lawsuit claims the letters were libelous and contained “racial overtones.” Jones, Davis and Webb are black.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
In the lawsuit, the former executives defend some of the spending as necessary to create a “modern, progressive and national bank.”
The three former executives describe the letters as a “power play” to wrest away control of the bank.
The former executives seek monetary damages.
CertusBank dates to 2010, when the three executives and a fourth, Charlie Williams, obtained a bank charter for their holding company, Charlotte-based Blue Ridge Holdings Inc.
The company bought five failed banks across South Carolina, Georgia and North Carolina and grew to $1.8 billion in assets.
But the bank quickly piled up tens of millions in losses. CertusBank lost $64.3 million last year, according to federal filings.
After the letters from investor Benjamin Weinger emerged, the bank executives urged people not to rush to judgment.
On April 9, the board fired Jones, Davis and Webb and installed community banking veteran John S. Poelker as interim CEO.
The lawsuit names CertusBank, Weinger and his company 3-Sigma Value Financial Opportunities LP as defendants. None were immediately available for comment.