CHICAGO–The president of a bank that was acquired by a credit union in a deal that has led to a lawsuit over alleged accounting issues and who was later terminated by the credit union has won a half-million-dollar settlement against the CU, according to a new report.
Todd Grayson, the former CEO of the $300-million South Central Bank, was awarded the payout by an arbitrator after he challenged his removal following a March 2020 meeting. South Central Bank was acquired by Oshkosh, Wis.-based Verve, a Credit Union, last year in a deal Crain’s Chicago Business said was valued at around $36 million. The $1.5-billion Verve beat out a competing offer from another Chicago bank identified as North Riverside-based West Town Bank.
“Keeping Grayson as Chicago president was viewed by Verve as key to the deal, according to its testimony before the administrator,” Crain’s Chicago Business reported. “But Verve’s view soured soon after the deal closed in January 2020. It discovered what it viewed as accounting discrepancies—Verve’s lawsuit against Grayson, his father Marc Grayson and others demanding over $1 million in reimbursements remains pending. Grayson wasn’t able to resolve them to the satisfaction of Verve’s leaders, according to the report.”
As CUToday.info reported earlier, Verve’s lawsuit, filed June 8 in Cook County Circuit Court, seeks recovery of about $1.2 million, claiming South Central artificially inflated its book value through accounting tricks.
‘Combative Meeting’
“Grayson was informed of his removal at a combative March 2020 meeting at the Union League Club in which by all accounts he was blindsided by the news, according to the report,” Crain’s Chicago Business reported. “Verve deemed him fired for cause and refused to pay him, but the merger agreement required such disputes to be heard before an arbitrator.”
Madison, Wis.-based arbitrator Danielle Carne concluded in her Nov. 25 report that Grayson did his best to answer Verve’s numerous questions about the accounting issues, which pertained largely to company purchases from vendors and when they were paid and recorded, the publication stated.
“The sixty days from the beginning to the end of Grayson’s tenure with Verve was too little time for Verve to have concluded, reliably, that it had cause for his termination,” Carme wrote.
‘Happy It’s Over’
Grayson declined to comment to Crain’s on what is reportedly a $500,000 payout other than to say, “I’m happy it’s over, and I was paid per my contract.”
Verve said it has not yet named a replacement for Grayson.