A former local banker claims he’s been short-changed some of the severance he was promised when he left for another job last year in the midst of his bank being acquired.
John Presley, former CEO of the former First Capital Bank, last month sued the parent company of North Carolina-based Park Sterling Bank, claiming it owes him an additional $408,000 in severance pay.
Park Sterling acquired First Capital in an $87 million deal earlier this year. Presley left First Capital while that deal was still in the works to take over the CEO seat at Toano-based Lumber Liquidators.
Upon leaving for the lumber retailer, Presley entered into a consulting agreement with First Capital in November, a $15,000-per-month position that was to run until the Park Sterling deal closed.
The consulting agreement called for Presley to receive a parting package including $1.56 million in severance/change in control payments, $278,000 worth of vested restricted stock and a $131,000 bonus. That all adds up to about $1.96 million.
Presley’s lawsuit claims that Park Sterling became party to the agreement by absorbing First Capital. The case alleges Park Sterling breached the agreement by interfering with the efforts of a tax advisory firm hired to analyze the tax consequences of his severance package.
The bank paid to have an independent accountant analyze whether Presley’s severance package would be subject to a so-called excess parachute payment, a tax for executive change-in-control payouts beyond a certain threshold.
That analysis, handled by New York-based CohnReznick Advisory Group, led to discussions of the package being decreased in order to prevent the extra tax consequence, as well as an argument over whether a dollar value should be pegged to a non-compete clause Presley signed.
The lawsuit alleges that Park Sterling did not allow CohnReznick to act independently, “but instead directed and dictated certain calculations and conclusions of CohnReznick concerning the existence of an excess parachute payment.”
Presley’s suit claims his payout was $408,925 less than it would have been “if a truly independent tax advisor had calculated the existence of an excess parachute payment.”
The lawsuit was filed in Henrico County Circuit Court on July 26. A provision of the consulting agreement called for any resulting litigation to be handled in Henrico County courts.
Presley wants the court to approve a judgment against Park Sterling for that amount, plus interest.
An email to Presley last week was not returned by press time.
He is represented in the lawsuit by Christian & Barton attorney James Moore, who did not return a call.
An email to a Park Sterling spokesperson was not returned by press time.
While he waits to see if the court will force Park Sterling to pay up, Presley’s new gig at Lumber Liquidators is paying him significantly more than his days at First Capital.