Former CEO files lawsuit against Mid-Missouri Bank
Earlier this month, a local judge recused himself from a wrongful termination suit against Mid-Missouri Bancshares.
Doug Watson, former Mid-Missouri Bank president and CEO, filed the suit in Greene County Circuit Court on Sept. 7, two months after he was dismissed for what the company calls breach of contract, according to court documents.
Watson alleges in the more than 200-page suit that he was wrongfully terminated without cause and is seeking damages of $500,000. But Mid-Missouri states in the suit that Watson was dismissed July 19 for violating company policy by “threatening an act of violence toward another individual while on company property.”
Watson, who declined via e-mail to comment on the lawsuit, asserts in the filings that Mid-Missouri Chairman Lee Gilbert fired him “because of his belief that (Watson) had information which implicated him in civil and criminal misconduct.”
Bolivar attorney Jay Kirksey of Kirksey Law Firm LLC is representing Watson, and Mid-Missouri is represented by Laurel Stevenson in Lathrop & Gage LLP’s Springfield office. Watson further alleges in the suit that Mid-Missouri Bank, under Gilbert’s management, became a troubled institution with losses around $88 million. The Federal Deposit Insurance Corp. and Missouri Division of Finance placed the bank under a letter of agreement saying Gilbert was to step down from management and relinquish daily operations of the bank, according to the suit.
The bank recorded its highest troubled asset ratio of more than 60 in June 2008, according to BankTracker, an online research tool developed by the Investigative Reporting Workshop at American University in Washington, D.C., but its rating has steadily declined since.
Its TAR in September, the most recent month reported, is 30.9, compared to a national TAR average of 15. Total assets stood at $480.7 million in September, down from $543.6 million a year prior, according to FDIC. Total deposits are $406 million.
Conversation at the crux In November 2009, Watson was named president and CEO of the bank, where he had worked since July 25, 2007.
During the week of Jan. 11, 2010, Watson discussed a letter written by board secretary Tawnya Dampier to the FDIC, in which she expressed concerns about how Gilbert requested the removal of board member and bank audit committee member Ray Pritchett without board approval.
Watson claims in the suit his conversation with Dampier ultimately led to his dismissal. Dampier told Watson on Jan. 15, 2010, that she reported to the Missouri Division of Finance what she believed to be misrepresentations and improprieties by Gilbert regarding Pritchett’s removal. Dampier was terminated Jan. 19, 2010, according to the suit.
“You have people who are supposed to follow regulations, follow the law and act independently, but if they do and a person who can fire them controls the board, where’s the checks and balances?” Kirksey said. “Where’s the safeguard for taxpayers who are bailing out these banks?”
Gilbert later told Watson he believed Watson was involved with Dampier’s report to the Finance Division, the suit states. Watson was terminated six months after Dampier’s firing. Neither Gilbert, contacted at his home, nor Eric McClure, Mid-Missouri Bancshares president and CEO since Aug. 23, would comment on the lawsuit.
Mid-Missouri attorney Stevenson declined to comment on details of the Watson case but said her client is prepared to go to trial.
“When it comes to lawsuits, our position has generally been for many years, cases are best tried in the courtroom,” Stevenson said, declining to comment on the possibility of a settlement.
Greene County Associate Circuit Judge Mark Powell recused himself from the case Jan. 5 because two local attorneys could be called as witnesses. Judge Mark E. Fitzsimmons is now presiding.
“It’s a trial I very much look forward to,” Kirksey said. “By the time we get a judge, by the time we take all the depositions, it’s going to be the fall or winter of this year. Will it go to trial? Only if the defendant makes the wrong decision. It’s a very strong case. What happened here was wrong.”
High turnover Watson’s firing is the latest in a series of dismissals and business developments at the bank. Since 2007, Mid-Missouri has endured at least seven firings and seven resignations of key officials.
Gary Rice, a former executive vice president at the bank’s Bolivar branch, was fired in December 2008. He sued the bank in Polk County Circuit Court for alleged age discrimination. Rice worked for Mid-Missouri for 44 years and was fired seven days before his 65th birthday. In the complaint, Rice alleged that Mid-Missouri – under the direction of Gilbert and then-President and CEO Lee Keith – implemented an unspoken policy that punishes senior employees and rewards younger ones. The case was dismissed with prejudice Dec. 3.
In April 2007, the bank dismissed Joplin branch President Scott Rosenthal and loan officer Kay Muskrat. Loan officers Chris Couch, Frank McReynolds and Tim Langston each were fired shortly after that.
An investigation by the Missouri Division of Finance, FDIC, FBI and the bank’s bonding company followed the Joplin firings. Officials with the state Finance Division, FBI and FDIC declined to say if the case was ongoing, citing confidentiality policies.
Four executives – McClure, Watson, Keith and Brad Weaver – have held the Mid-Missouri’s president post since July 2007. Weaver’s departure capped an exodus of executives.
Michael Hoff, who was president of Mid-Missouri’s El Dorado Springs branch for three years, left in March 2007, weeks before the Joplin branch firings and subsequent investigation. Other Mid-Missouri executives who left after Hoff include Weaver, Bill Lee, Steve Hite, Bob Berlin, Doug Buckner and Thane Kifer.
The bank also voluntarily shut down its mortgage arm, Mid-Missouri Mortgage Co., in late 2007 and sold a consulting subsidiary, Superior Consulting LLC, to the firm’s former senior vice president, Mary Boyd, in December 2008, laying off 34 employees.[[In-content Ad]]