Capital One Financial (COF) has settled a longstanding legal dispute with former executive John Kanas.
Kanas and John Bohlsen will pay the McLean, Va., company $20 million to settle claims that they breached a 2007 employment agreement, Capital One said in a Tuesday press release.
Capital One filed a lawsuit in the U.S. District Court for the Eastern District of Virginia against the executives last July after BankUnited (BKU) announced plans to buy Herald National Bank in New York. The lawsuit claimed that Kanas and Bohlsen, executives at BankUnited, breached a noncompete agreement.
Under terms of the settlement, BankUnited agreed to abstain from opening any branches in New York, New Jersey or Connecticut until Jan. 31, 2013. Herald National will remain a separate unit from BankUnited; Kanas and Bohlsen will avoid involvement with Herald until next January. The settlement also includes "certain nonsolicit arrangements with respect to Capital One customers, as well as certain non-hire arrangements with respect to Capital One employees," the release said.
BankUnited said that the provisions in the settlement agreement will not have any material financial impact on the Miami Lakes, Fla., company or any material effect on its strategic plans in the New York area.
Kanas, now the chairman and CEO of BankUnited, joined Capital One in 2006 after it bought North Fork Bancorp in Melville, N.Y. Kanas, who was kept on to run Capital One's bank, left the company less than two years later. In late 2009, he was part of the group that bought BankUnited after the thrift failed. Bohlsen led Capital One's commercial banking operations before leaving.