Capital One to Get $20 Million to Settle Suit vs. BankUnited Officers

   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 [e-mail] and Nathalie Tadena at [e-mail].