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Bank sues own executive
By JEFF HARRINGTON, Times Staff Writer
ST. PETERSBURG -- In a sign of more intense competition in local banking circles, South Financial has filed a rare lawsuit to keep a top executive with its Mercantile Bank unit from launching his own Tampa Bay area bank. South Financial, the South Carolina company that bought Mercantile last year, said Robert Blakley is breaching a noncompete clause in his employment agreement by organizing a startup while still a Mercantile employee. Blakley, the Tampa Bay market president for Mercantile, has attempted to hire other Mercantile employees and met with at least six Mercantile customers to solicit their deposits, according to the suit South Financial filed Tuesday in Pinellas County Circuit Court. Although some local banking veterans said they were unaware of Blakley's fundraising, South Financial said the executive already has commitments totaling $7-million toward a projected capital investment goal of $10-million. Blakley could not be reached for comment. Andy Cheney, president of Mercantile Bank in Florida, said Blakley went on leave last week because of the "contract dispute" and Doug Winton was named acting market president. Other than acknowledging such a lawsuit is "very rare in my experience," Cheney referred other questions to the suit itself. According to the filing, Blakley had agreed to not engage in any competitive venture for a three-year period that began March 2002, under his employment contract. The agreement was extended automatically each month during his employment. In return, he was paid an annual salary of $190,000, plus awarded various incentive compensation plans and benefits. When Mercantile was bought out by South Financial, Blakley received $682,000, plus payments of club dues and "other inducements," according to the lawsuit. Blakley allegedly sought advice from lawyers and accountants about the startup and tried to recruit directors. At the same time, South Financial alleges that Blakley shirked his duties at Mercantile "and was notified of his inadequate performance on several occasions." The lawsuit comes as former Mercantile executive Barry Miller prepares to launch a rival bank this spring. Miller has recruited other former Mercantile employees for his venture, called Old Harbor Bank, and has received conditional approval from Florida regulators. Dick Hunt, a veteran bank consultant in Tampa who is advising Miller, said his client had a noncompete agreement with Mercantile as well, but it expired before he began organizing Old Harbor. Hunt said Wednesday that Blakley is not part of Miller's startup. The consultant said he was unaware of Blakley's plans and stunned at news of a lawsuit. Hunt, who has been involved in more than 100 bank startups since 1979, said such suits are rare, in part because of the backlash they can cause to a bank's reputation. "I think it's stupid quite frankly ... for the damage it does (to) them community relation-wise," Hunt said. "The common people will say, "The big company is coming down on the little guy. He's just trying to make a living.' " -- Jeff Harrington can be reached at harrington@sptimes.com
or (813) 226-3407.
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From the Times Business report
From the AP
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