By Tess Stynes and Nathalie Tadena
Capital One Financial Corp. (COF) will receive $20 million in a
settlement of a lawsuit the bank filed against two BankUnited Inc.
(BKU) executives nearly a year ago, alleging they had breached
terms of a 2007 noncompete agreement.
BankUnited Chairman and Chief Executive John A. Kanas and Vice
Chairman and Chief Lending Officer John A. Bohlsen agreed to settle
the lawsuit, but denied any liability and made no admission of
wrongdoing. BankUnited said provisions in the settlement agreement
won't have a material financial impact on the company.
Under terms of the settlement, BankUnited won't open a bank
branch in New York, New Jersey or Connecticut until Jan. 31, 2013.
Additionally, Herald National Bank, a New York-based unit of
BankUnited, will continue to operate separately from BankUnited's
primary banking subsidiary as a distinct legal entity until Jan.
31, 2013. Kanas and Bohlsen will continue not to play a management
role or serve on Herald's board until after that time.
Last year, Capital One challenged BankUnited's acquisition of
Herald and filed suit in federal court in Virginia alleging Kanas
and Bohlsen violated a noncompete agreement, due to expire in
August 2012. Both Kanas and Bohlsen had been executives with
Capital One before joining BankUnited.
A non-compete clause in a separation agreement Kanas and Bohlsen
signed in mid-2007 stated the two wouldn't compete with Capital One
as directors, stockholders, investors, employees, or in any other
capacity in New York, New Jersey and Connecticut.
Capital One shares closed at $55.05 Tuesday, while BankUnited
shares closed at $23.80. Both stocks were unchanged after
hours.
Write to Tess Stynes at Tess.Stynes@dowjones.com and Nathalie
Tadena at nathalie.tadena@dowjones.com.