A Los Angeles Superior Court judge has thrown out a lawsuit filed on behalf of shareholders by the former chairman of Nara Bancorp, a Los Angeles company serving the Korean-American community.
The case centered on Nara's actions after the discovery of a 2002 letter by the chairman of its board, Thomas Chung, to a former Nara chief executive, Benjamin Hong. Chung said in the letter that Hong had agreed to give up certain profit-sharing rights with the goal of "helping the bank's smoother earnings curve in the future."
An investigation determined that Nara's 2002 earnings needed to be restated based on that agreement. Chung and Hong were both asked to resign, and a year later Nara sued Hong. Hong also filed suit, and in arbitration the court found in his favor. Chung also sued over his removal from the board. Judge Carl West's Sept. 21 decision granted summary judgment in favor of the $3.2 billion-asset Nara, finding that the directors' decisions were "fully protected by the business judgment rule." DLA Piper handled the bank's case.