A Virginia circuit court on April 29 awarded $5.3 million in damages to the former chief executive and chairman of banking technology vendor Online Resources Corp. in an employment lawsuit he filed against the company.
The civil jury in the Circuit Court of Fairfax County on Friday rejected Matthew Lawlor’s claim that the Chantilly, Va.-based company wrongfully terminated his employment, but it found in favor of four other claims, including that Online Resources breached stock-plan and severance agreements.
“It’s about setting the record straight,” Lawlor said in an interview. “I’m pleased with the judgment.”
Lawlor said he involuntarily retired as CEO of the company, which he co-founded in 1989, in December 2009 after losing a proxy battle with the hedge fund Tennenbaum Capital Partners LLC, which put three individuals on Online Resources’ board. He remained employed at the company until February 2010.
Lawlor was seeking $15.9 million in damages from the company, Online Resources said in a press release.
“We are very disappointed in this verdict, and we intend to aggressively pursue all available avenues to have this verdict overturned or set aside,” John Dorman, Online Resources chairman, said in the release.
A spokesperson for the company, which provides online banking and bill-payment software to banks and credit unions, said in an e-mail that the company has decided to “pursue all available avenues, including post-trial motions and, if appropriate, appeals to set aside or overturn the verdict.”
In the lawsuit he filed in April 2010, Lawlor argued that Online Resources breached his contract under two stock-option plans, breached an implied employment agreement and other claims, according to Online Resources’ annual report.
Of the five claims that were part of the suit, the jury rejected Lawlor’s wrongful-termination claim.
John Kraft, an analyst who follows Online Resources for D.A. Davidson & Co., wrote in a research note published May 2 that the resolution of the litigation “will allow the company to move forward.”
Online Resources “has a valuable product suite, biller network, patents and client base, and we continue to believe the company is in the beginning stages of a turnaround that will eventually culminate in a sale,” Kraft wrote.
The company, which last year had a loss of $4.2 million on revenues of $149.5 million, announced in March its plans to continue operating as a standalone company after it received unsolicited bids from interested buyers.
Online Resources said April 29 that it was postponing its first-quarter earnings release to May 10 from May 4 to give it time to determine its potential liability costs.
Online Resources will take a reserve for the quarter that will include the amount of the judgment, prejudgment interest from the date of Lawlor’s February 2010 separation from the company and an estimate of Lawlor’s legal fees if the judgment is upheld, the company spokesperson said.
In announcing the delay of its earnings release, the company provided preliminary results for the quarter, including $39.3 million in revenue, which is above previous guidance it gave.
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