Bank breaches severance agreements of executives on change in control
Employment Law - Breach of Contract
Business Litigation - Severance Agreement
Los Angeles County Superior Court
Two bank executives invoked their right to obtain severance payments as set forth in their employment agreements upon a "Change in Control" occurring at the bank. The bank refused to pay claiming the executives had left voluntarily.

The Plaintiffs were the CFO and General Counsel, respectively, for CCB under written employment agreements including a provision guaranteeing Plaintiffs’ a right to depart the bank and invoke separation payments in the event of a "Change in Control" of the Bank.

Citigroup later purchased CCB’s holding company, and Plaintiffs’ invoked the severance buy out and left CCB.  Incredibly, the Defendant refused to honor the severance agreement, claiming that no change in control had taken place and that Plaintiffs merely left voluntarily  

During the litigation, Plaintiffs pointed to public filings and media reports from Citigroup labeling the acquisition of CCB as a “change in control” and therefore Plaintiffs alleged CCB was in breach for failed to pay the separation payments due of nearly $6 million.  Defendants attempted to characterize the acquisition as the purchase of the holding company, rather than the bank, and thus ownership of the bank did not change and no "change in control" occurred.  

The case proceeded to trial, and on the last day of trial prior to final argument, the case settled for $5.5 million.