In the latest chapter of the Republic First Bank saga, CEO Vernon Hill’s bid for an emergency temporary restraining order and preliminary injunction was denied by Judge Paul Diamond on May 19 in U.S. District Court in Philadelphia.
The ruling comes on the heels of a wild few days in the proxy battle, which saw Hill file the emergency lawsuit to try and stop his likely firing as chief executive officer at a board meeting this week.
As reported by NJBIZ (see our index of stories at right), the action came after a persistent 4-4 board stalemate was broken, following the death of longtime Hill ally, Ted Flocco. That led to the swift ouster of Hill as chairman of the board, replaced by Republic First Bank founder and Hill’s now-adversary, Harry Madonna.
Read the latest in the Republic Bank battle
- Republic Bank CEO Hill files federal lawsuit to stop ouster
- Norcross withdraws Republic Bank lawsuit, Hill moves to block ouster
- Hill out as Republic Bank chairman, Madonna named interim
- Death of Republic Bank director could reshape proxy fight
- Judge prods Republic First Bank board for response in proxy fight
- Norcross group backs Driver slate in Republic Bank battle
- Business giants square off in battle for Republic First Bancorp
The Madonna faction of the board is backed by an activist investor group led by South Jersey business and political heavyweight George Norcross’ group, in addition to one led by Abbott Cooper of Driver Management Co. Flocco’s death not only broke the stalemate, but board bylaws state that under the circumstances a replacement for Flocco would be selected by the board majority, not the chairman, which would give the Madonna faction an even larger majority.
The chain-of-events led Hill to file a scathing 52-page complaint, seeking the temporary relief, as well as the appointment of a neutral custodian to oversee the bank’s business.
Hill accused Madonna of aligning with the activist investor groups and organizing a coup against him, alleging financial incentive by the now chairman of the board if the bank is sold.
“Since early March the Madonna faction has intentionally kneecapped the management and board functions at the company, made unfounded and knowingly false accusations of misconduct against the directors who refused to go along with their selfish scheme, and hindered FRBK’s ability to defend against coordinated lawsuits initiated by Driver and Norcross based on the Madonna faction’s false statements,” Hill alleged in the pleadings.
Diamond deferred on a decision about whether to appoint a custodian. He has given the defendants no later than May 23, at noon, to respond to that request for the custodian, and show that Republic Bank is capable, without a custodian, of governing itself in a manner consistent with the best interests of its shareholders.
A day earlier, Diamond ordered both sides to a seven-day cooling off period, maintaining the status quo of the bank while the sides attempt to work out their differences.
Prior to Hill’s lawsuit, Norcross’ group had dropped two previously filed lawsuits and signaled its support for Madonna as board chairman.