Commerce Bank founder Vernon Hill has lost his bid to collect more than $17 million in back pay from Toronto-Dominion Bank, which bought Commerce in 2007.
A federal jury in Camden, N.J., ruled Tuesday that the law allows TD to withhold the $17.2 million in salary, bonuses and stock options that Hill had sought, according to a news report in the Philadelphia Inquirer.
Hill, who had founded Cherry Hill, N.J.-based Commerce in 1973, was forced out in 2007 as regulators probed potential conflicts of interest between Commerce and other companies he controlled, including millions of dollars in payments the bank had made to a design company run by Hill's wife. In January 2008, Hill sued Commerce, which had recently sold itself to TD, demanding that it honor payout provisions in his employment contract.
"I want the jury to enforce the terms of my employment agreement," Hill testified this month, according to the Inquirer.
TD claimed that it could not pay Hill the money because in order to do so, it would have to certify that it had no evidence that Hill had engaged in wrongdoing while at the bank. Hill has been involved in various legal fights over the years; he was a subject of a Philadelphia corruption investigation in which two Commerce executives were convicted in 2005, and at the heart of class actions filed against former Commerce executives.
In 2008 Hill signed a consent order with the Office of the Comptroller of the Currency forbidding him from insider dealings with financial institutions. The order also required that he pay TD $4 million.
Hill testified that none of these investigations turned up any wrongdoing on his part and that Commerce's $8.5 billion sale price affirmed that he had managed the bank properly.
"I had nothing to do with the sale," Hill testified, according to the Inquirer, "but I had everything to do with building the bank they bought."
A TD Bank spokeswoman said the bank is pleased with the verdict and hoping to put the matter to rest.
Hill's attorney, Edwin Jacobs of Jacobs & Barbone in Atlantic City,, N.J., said that his client disagrees with the jury's verdict and is planning to request a new trial. If the request is not approved, Hill plans to appeal the decision, Jacobs said.
Other legal disputes between Hill and TD are still active. Last November TD sued Hill over his book Fans! Not Customers: How to Create Growth Companies in a No-Growth World (Profile Books, 2012), claiming that Hill lifted large portions of the book from a manuscript that TD now owns.