Republic First Bancorp chief executive Vernon Hill asked a federal judge Tuesday to give him back his additional post as the bank’s board chairman, which he lost amid a bitter boardroom struggle last week.
The request sought to reverse the board revolt that propelled Hill’s predecessor, Harry Madonna, into the chairman’s post five days ago. The board had been locked into opposing factions, each with four members. Then Madonna became chairman on May 13 after Hill ally Theodore Flocco died on May 10, giving Hill’s opponents a 4-3 majority.
In the filing, Hill asked U.S. District Judge Paul S. Diamond to effectively bar Madonna and his allies from going further and replacing Hill as chief executive at meetings scheduled for Tuesday night and Wednesday.
The judge held a hearing that started at 5:30 pm Tuesday and ended too late for this edition.
Hill noted in the complaint that the board faction opposing him is allied to a group headed by onetime Hill ally George E. Norcross III, which has recommended replacing Hill as CEO with former TD Bank executive Greg Braca.
The dissidents say that Hill has been opening too many branches, and that the bank should cut costs and boost profits. The bank has 33 branches in New Jersey, Pennsylvania, and New York.
Hill’s complaint alleged the insurgents have “waged a campaign to seize control” of the bank, using “self-interested machinations” that would enable them to sell the bank or bring in new investors on terms that Hill alleges would mostly benefit themselves.
A spokesman for the Madonna faction had no immediate comment on the complaint.
Hill’s complaint claims Madonna and his allies have “kneecapped” management at First Republic and “hijacked” the board after Flocco’s death. The complaint also accuses the rival board faction of making “unfounded and knowingly false” accusations against Hill and his allies.
The complaint also asked the court to appoint a neutral custodian to oversee the bank’s business, given the board’s recent deadlock.
Hill and his remaining board allies, accountant Barry Spevak and advertising executive Brian P. Tierney, asked Diamond to prevent Madonna and his board supporters from making any changes to the board of Republic’s subsidiary, Republic Bank, or from contacting employees as if they spoke for the bank. Madonna’s supporters include Andrew B. Cohen, a hedge fund investor; Lisa Jacobs, a Philadelphia lawyer whose clients include Madonna; and Harris Wildstein, a New Jersey businessman who co-founded the bank with Madonna in 1988
The complaint pressed Diamond to block the group from attempting any board business until there are eight directors again, after Flocco’s seat is filled in contested elections expected later this year.
Hill added that Madonna has “a powerful incentive” to sell the company because his employment contract will pay him a million-dollar, change-in-control bonus if the bank is sold.
Hill also notes in the complaint that the group of board members Madonna heads has “made common cause” with dissident investors, including Driver Management Co., a hedge fund that pushes banks to cut costs and boost profits, as well as Norcross’ group, which has been buying up Republic shares.