Summit Financial Group Inc. in Moorefield, W.Va., has moved to settle a trade secret claim made by Corinthian Mortgage Corp. by signing a letter of intent to negotiate the purchase of Corinthian's parent, Commonwealth Savingshares Corp., for $52.5 million in cash and stock.
The $1.3 billion-asset Summit said in a Nov. 23 filing with the Securities and Exchange Commission that it might buy Commonwealth, a Delaware corporation, and its banking unit, the $324 million-asset SouthBank, in Huntsville, Ala., to settle a 2003 lawsuit by SouthBank's mortgage subsidiary, Corinthian. The mortgage company claims that Summit Financial LLC, Summit's mortgage subsidiary, unlawfully used Corinthian's trade secrets after hiring former Corinthian employees.
If the merger agreement falls through, Summit would instead pay $10.5 million in cash to settle Corinthian's claim. Corinthian's president, Danny L. Wiginton, is also Commonwealth's largest shareholder.
