A former bank executive has filed a lawsuit against Macon-based Security Bank alleging breach of contract and that the bank owes him nearly $600,000 in unpaid compensation.
The civil case was filed in the Superior Court of Bibb County on May 15.
H. Averett “Rett” Walker resigned from Security Bank Corp. and its affiliate Security Bank of Bibb County in mid-September. According to an 8-K Form filed with the U.S. Securities and Exchange Commission at the time, Walker would receive as separation pay twice his base salary and incentives — or $845,932, less taxes and other withholdings — in a lump sum by April 1. The separation agreement is signed by Walker and Alford Bridges, chairman of the bank’s board.
According to the lawsuit, as an advance against the severance payment due Walker, the bank loaned him $250,000.
The balance of $595,932 has not been paid as set out in the employment agreement, according to the complaint.
Calls to Walker and his attorney were not returned Thursday.
Bank spokesman Tom Woodbery said, “We will not have a comment on any litigation, pending or otherwise.”
A response by the bank to the complaint has not been filed with the court.
At the time of Walker’s resignation, Senior Vice President Lorraine Miller said his resignation “was not event-driven,” and “I can also say this is not something that was at the request of regulators.”
According to the complaint, the board of directors notified Walker on Sept. 16 “that they had enough votes to terminate his employment.”
Instead of being terminated, Walker turned in his resignation, which was “expressly contingent” on the bank honoring its severance payment due him in the employment agreement, according to the suit.
In October, the bank and Walker signed a severance agreement and again the bank agreed to pay Walker $845,932 by April 1.
However, on March 27, the bank notified Walker by letter that the bank would not be making the severance payment because it “had been informed by the regulators at the Federal Reserve System that the severance benefit payable ... is a ‘golden parachute payment,’ ’’ as defined by the Federal Deposit Insurance Corp.
But the complaint says that part of the description of a golden parachute payment requires that the bank was in a “troubled condition” or that the holding company was assigned a composite rating of four or five when Walker was employed. However, the bank wasn’t notified by the FDIC it was in a “troubled condition” until Dec.19, which was three months after Walker left the bank.
Also, the Federal Reserve notified the bank its composite rating was downgraded to a four about Jan. 1, which was again more than three months after Walker resigned, the complaint states.
Since Security Bank was notified in mid-March by the FDIC through a cease-and-desist order for five of its six subsidiary banks that it must satisfy a number of conditions to avoid being shut down or being subject to receivership by the FDIC, “the future solvency and continued operation of the bank is in jeopardy,” the complaint states.
Therefore, Walker wants the court to intervene in order to ensure payment.
The bank reported a net loss of $18.5 million for the first quarter ended March 31, compared to a net loss of $24.2 million for the first quarter of 2008.
Last year, the bank reported a net loss of $88.6 million for the fourth quarter, $20.1 million loss for the third quarter, $121.4 million loss for the second quarter and $24.2 million loss for the first quarter — all when compared to the same quarter of 2007.
To contact writer Linda S. Morris, call 744-4223