The founders of CertusBank misappropriated company money, spent lavishly on themselves and sought to conceal its dire financial straits from investors, a new lawsuit alleges.

Six funds that backed the now-defunct Greenville, S.C., company at its founding nearly four years ago have sued its four founders, who they claim enriched themselves at investors' expense, and six former directors, who they say failed to keep the founders in check. The suit was filed Friday in the Delaware Court of the Chancery but not made public until late Tuesday.

The suit claims the four former Certus executives — Milton Jones, Walter Davis, Angela Webb and Charles Williams — "pilfer[ed] and squander[ed] company resources in order to fund their luxurious lifestyles." The former management team was dismissed in April 2014, less than two weeks after an American Banker article described the company's outsized spending, including controversial insider transactions, and ballooning losses.

Efforts to reach the former executives on Wednesday through their attorney were unsuccessful.

The investor suit claims that Jones, Davis, Webb and Williams "burned through vast swaths of cash" pursuing "a lush lifestyle — including both material benefits and attendant lofty profiles and reputations — by spending company funds on expensive apartments and furniture, office space and other real estate, and various perquisites."

The timing of the suit is apt, coming just days after Certus effectively shut down. Its new management spent more than a year selling off its banking assets while continuing to hemorrhage money. It lost $21 million in the first half of 2015, after losing a combined $166 million from 2012 through 2014, according to call reports.

The suit, which seeks class-action status, punctuates the dramatic failure of a project that began with great promise. Certus' founders — former Bank of America and Wachovia executives — raised $500 million from a group of hedge funds to buy failed banks throughout the Southeast, relying on the ample financial support the Federal Deposit Insurance Corp offered for such deals.

With the backing of important Democrats on Capitol Hill, including Barney Frank and Maxine Waters, they managed to outflank dozens of other groups to win a charter to buy failed banks — one of just five such charters issued. Certus opened in January 2011 and ultimately made five FDIC-assisted deals.

The funds now suing are not Certus' largest investors, which include John Paulson's Paulson Investment Management and Tricadia Capital Management. The biggest name among the plaintiff funds is BlueMountain Capital, a company led by former JPMorgan executive Andrew Feldstein.

Certus has a total of 48 shareholders, and the six funds suing hold about 14% of Certus' class A shares and 25% of its class B shares, according to the suit.

The suit also represents a counter-volley by one fund manager, Ben Weinger of plaintiff 3-Sigma Value Financial Opportunities, whom three of the bank's founders sued for defamation last year after he allegedly circulated a letter among investors criticizing the bank's spending and calling for management to be fired. That suit has been dismissed by two judges but was refiled last month in the U.S. District Court for South Carolina.

The lawsuit filed Tuesday accuses the former executives of breach of fiduciary duty and corporate waste, among other charges, and asks for all the pay they received from the company, plus damages and legal costs.

It offers a detailed description of the executives' alleged excessive spending on private jet travel, art purchases, personal condominiums with luxury upgrades, a wine cellar and private theater for their offices, and more, as part of what it calls a "campaign of self-aggrandizement."

The plaintiffs claim that the spending far exceeded what the board authorized. While the board approved the founders to lease one floor of office space for a company headquarters, they instead leased eight floors, at a total cost of $110 million in lease commitments, the suit says.

It also claims the former management team "manipulated" the company's 2013 budget to show investors a minimal forecasted loss, overriding objections by the finance team.

Management allegedly tried to persuade the finance department to revise downward its large estimated loss, before presenting investors with a budget showing a projected loss of just $3.5 million. When Chief Financial Officer German Soto objected, the executives allegedly threatened his job. Certus ultimately lost $78 million in 2013, the suit says.

The suit also alleges that the founders made unauthorized payments to a consulting firm they owned and sold themselves bank-owned cars at well below market value, despite warnings from Certus' lawyers that the car sales violated federal law, the suit says.

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