Newspaper article St Louis Post-Dispatch (MO)

Banker Sues Reliance over Back Pay and Benefits

Newspaper article St Louis Post-Dispatch (MO)

Banker Sues Reliance over Back Pay and Benefits

Article excerpt

Jerry Von Rohr, a former top executive and founder of Reliance Bank, is suing his former employer over back pay and benefits, claiming that the money isn't a "golden parachute" limited by the Troubled Asset Relief Program.

Von Rohr, a longtime St. Louis banker who founded Frontenacbased Reliance in 1999, was fired in 2011, and he claims the termination was without cause. He was replaced as CEO in 2010 but remained an executive until he was replaced as chairman of Reliance's parent company, Reliance Bancshares, in 2011.

In a lawsuit filed this week in federal court, Von Rohr alleges that Reliance breached his employment contract by not paying him salary and benefits from September 2011 to September 2012.

Von Rohr is seeking one year's salary totaling $338,000, $12,000 for the use of a company car, $15,500 for a country club membership, $15,500 for bank-related board duties, $10,000 for 401 (k) retirement plan contributions and $17,500 for miscellaneous perks and benefits, including attendance at banking conventions.

In the suit, Von Rohr argues that his employment contract at Reliance extended through September 2012, a year after his termination was effective.

The bank and the Federal Deposit Insurance Corp. also named as a defendant declined to comment on the pending litigation.

According to the suit, the agency wrongfully contends that payment to him would violate TARP regulations. Von Rohr argues that no regulations, including TARP, prohibit the bank from honoring his contract.

The U.S. Treasury invested $40 million in Reliance through TARP in 2009 as part of the government's effort to stabilize the nation's financial system. Banks were able to raise their capital levels by selling the Treasury preferred stock equal to as much as 3 percent of their risk-weighted assets.

Reliance has yet to repay the money and has deferred quarterly dividend payments on the investment. Deferring the payments put the bank under heightened scrutiny from regulators, and the bank agreed to have a Treasury observer attend its board meetings. …

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