Archive for Saturday, March 10, 2012

Lawsuit against Lawrence bank attributed to ‘family feud’

March 10, 2012


A long-simmering family dispute has morphed into a lawsuit against Lawrence-based The University National Bank and its board of directors.

Martha Sutherland — a shareholder of University National Bank’s holding company and the sister of University National Bank executive officer Todd Sutherland — has filed a lawsuit in Douglas County District Court alleging improper lending practices and management have cost the bank in excess of $20 million.

Todd Sutherland, president and chairman of the bank’s holding company, said he and the board “vigorously oppose” the allegations made in the lawsuit. He characterized the bank as being caught in the middle of a family disagreement that has resulted in Martha Sutherland filing several lawsuits against business holdings of the Sutherland family.

“It is part of a long-standing family feud that has been going on for several years,” Sutherland said. “Several other lawsuits involving other members of my family have been filed, and now unfortunately directors of the bank are drawn into this.

“What the community needs to know is it is part of a long-standing family feud, and the lawsuit really is more about that than it is about the bank.”

The lawsuit lists all board members of University National Bank and its holding company, Lawrence Financial Corporation, as defendants: Sam Campbell; Tim Fritzel; Mike Flory; Monte C. Johnson; Dolph Simons III; Perry Sutherland; Todd Sutherland; Darrel G. Walters; and Richard Zinn. Simons is an executive with The World Company, which owns the Journal-World.

The lawsuit comes about three months after University National Bank and Wichita-based Equity Bank scrapped a planned merger. When the companies announced in December that the merger had been canceled, they said it was a mutual decision. This week, Sutherland said the threat of the lawsuit likely caused parties in the merger to take pause.

University National Bank in 2008 entered into an agreement with the Office of the Comptroller of the Currency to take steps to strengthen the bank’s position. The bank remains under that agreement, and Sutherland said several other banks in the region are under similar regulatory agreements. Sutherland said the bank is making significant progress in complying with the conditions, and has maintained capital levels well above what is needed for a well-capitalized bank. He said the lawsuit should not hamper the bank’s progress in complying with the order.

“We have made tremendous progress in complying with the formal agreement and hope to be off of it soon,” Todd Sutherland said.


ljwhirled 5 years, 10 months ago

Hold on a second.

So Dolph Simons III sits on the board of a bank that lends primarily to Lawrence developers who.......get this......also sit on the board of the bank.

I'd be willing to bet that the Simons family also keeps substantial assets in the bank. That or they use it to borrow money from the public at large for local projects.

And this isn't disclosed in every single story on a Fritzel development project?

LJWORLD: You got some explaining to do. Seriously.

Jonathan Becker 5 years, 10 months ago

Really, Chad. An agreement with the OCC is to "strengthen the bank's position"???? You get an "A" for obfuscation. The stand-still agreement prohibits the bank from making loans of more than $250,000 without the OCC's approval because the bank's capital reserves were below what the OCC thought was prudent. Do some good investigative reporting and tell us how many loans for more than $250,000 have been approved since the agreement. UNB overloaned and had too many non-performing loans on the books. Write the word bankers fear - insolvent.

As Will Rogers said, " I am not so concerned about the return on my money, as I am the return of my money."

brewmaster 5 years, 10 months ago

Perhaps, this might be an alternative version of the story:

Some cozy owners and board members of a federally insured bank make unsecured, questionable loans to their other business interests i.e., themselves. Then because of their malfeasance the bank becomes technically insolvent.

They attempt a hastened merger with an out-of-town bank, so they can distance themselves from their own wrong-doing.

In the midst of their chicanery federal regulators place the bank into conservatorship. Although, the term conservatorship is replaced with the phrase "regulatory agreement."

Thus, allegations and recriminations ensue.

FlintlockRifle 5 years, 10 months ago

Hey "kids" what would Dwight, think of this mess???

brewmaster 5 years, 10 months ago

The silver-spooned Sutherland "kids" have a well established history of squandering their father's and grandfather's money. Evidently, they can mismanage and bankrupt about any kind of business ranging from a retail chain of lumber yards to banks.

Michael Henderson 5 years, 10 months ago

The Simons Family has a long history of promoting its own business interests via stories in its "news"paper, the Lawrence Journal-World. Typically, they don't disclose these ties, so we have to learn about them from other sources. Tim Miller's Plumber's Friend of a few decades ago filled this valuable niche, naming Dolph Jr. "Dolph Lite," and Dolph III "Baby Dolph," after the model of Haiti's Papa Doc Duvalier and his son Bebe Doc. It's sad, but unsurprising, to see Baby Dolph following his ancestors' practices. Venal as they may be, they are praise-worthily appalled by the Brownback administration's more right-wing policies.

ljwhirled 5 years, 10 months ago

I'm not worried about the conflicts. I am actually glad that they are keeping capital here in Lawrence.

What concerns me is the lack of disclosure. Watching Dolph's minions attack Lawrence Freenet and work to cut off their access to the right-of-way was eye opening for me.

I agree that Tim's Plumber's Friend was a great asset to the community. There have been several other attempts in the past as well. None successful.

The problem with this city is that people don't put their money where their mouth is. They want to support local business, but then spend their money at Wal-Mart, Target or Dillons instead of Checkers.

If the Simon's family has an interest in a deal, whether as a financial backer (via University National Bank, real estate owner (the riverside outlet mall) or as a parent company (Sunflower Broadband / AKA Knology / soon to be Comcast ), then the paper needs to disclose it.

Too many times the public doesn't realize that the newspaper's owners have a stake in the deal that the editorial board is supporting or the newsroom is reporting on.

irvan moore 5 years, 10 months ago

dang,the rich people fighting amongst themselves

pace 5 years, 10 months ago

The article seems funny, most lawsuit are feuds, the tone of the article's intent seems to be dismissive, family feud? We will see. At least the players are familiar.

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