Texas Capital Bancshares Inc. in Dallas has lost the first round in a legal battle over a loan it made to an Oklahoma automobile dealer that soured.
The dispute dates to the second quarter of last year, when Texas Capital charged off the unpaid balance of a $10 million loan and then filed suit in Dallas against the guarantors seeking to recoup the loss, plus $21 million in damages, according to a research note from Evercore Partners.
The guarantors then countersued in Oklahoma, and earlier this week a jury there ruled that Texas Capital must pay $65.4 million in damages to the guarantor of the loan who had filed suit against the bank last year.
In its research note, Evercore Partners said that the damages could cost Texas Capital roughly $1.11 per share for the year, or roughly 67% of its estimated profit.
But in a Securities and Exchange Commission filing Friday, Texas Capital said that it has been advised by its lawyers that there were "numerous legal errors" that led to the verdict and, as a result, it intends to "promptly" file an appeal.
The company also said that it intends to aggressively pursue the initial suit it filed against the guarantor, Steve Rouse, and the borrower, TriCounty Autoplex in April of last year.