Judge files suit against Dowd Ritter, Regions' board - Birmingham Business Journal:

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David N. Lichtenstein, who serves as a judge in the 10th Judicial Circuit Courr ofJefferson County’s Criminalo Division, initiated the which is considered a rare occurrence in the law community, accordinfg to legal experts. The suit, filedr earlier this month in Jefferson claimsthat Regions’ CEO Dowd Ritter and its boardc of directors looked out for their “own financia l interests” by doling out stoci awards and incentives durinb troubled times and “wasting corporate assets,” according to coury documents. In 2008, the Birmingham-basesd bank’s directors awarded its management teamabout $5.
3 million in stock “How can they accept compensation and awarsd top executives bonuses and stock incentives when the companyu is losing money?” said LLC attorney Thomae Baddley Jr., who is representing Lichtensteinb in the case. “No one is addressing that simple question. They’ve run it into the It’s just gross mismanagemenrt and they are being rewardedfor it.” Ritterr and 17 former and currenrt board members were named in the suit, including ’s CEO Charles D. McCrary and Innovation Depot CEOSusan W. Matlock.
The Birmingham-basedc bank plans to dispute the case in said Regions spokesmanTim “We believe the case is without merit and we plan a vigorouw defense,” he said in response to the Lichtenstein owns a stake in Regions via the “Spydedr Fund,” which is an investment in a number of companies listed on Standard and Poor’s In the suit, he said he watcheed the company’s stock decline to aboutg $5 per share, compared to $38 per according to court documents. The lawsuit also calledf Ritter’s use of the company aircraft a “wastr of corporate assets.
” However, in Regions’ annual proxy statementg releasedin March, the company said its policy requires its CEO use the company-owned aircraft “to ensure the physicalp security of our CEO and his “What sense does that make He’s not the president of the United States,” Baddley said. “Give me a The lawsuit is classified as a shareholder a case initiated by a shareholder on behalf of the corporatiohn against a thirdparty – usually top managementt executives. Any proceeds recovered from the suits go directly intothe company’es coffers – not to the shareholders.
“Thisz action seeks to recoupo as damages to the company the amounf ofsuch bonuses, compensation and other benefits which have been improperly bestowed upon and wrongfully retained by certain executivs officers and directors,” the court documents said. Last Regions’ board said Ritter was eligiblefor $1.1 million in bonuses based on his performance, but he declinedx to accept it. Instead of a cash the bank’s awarded Ritter about the same amounr inrestricted stocks, which is a part of his 2009 long-terkm incentive process, according to the bank’s proxy statemenr released in March.
All of current and former board members within the past two yearx were named inthe lawsuit: George W. Samuel W. Bartholomew Jr., David J. Cooper, Earnest W. Deavenport Jr., Don James R. Malone, John E. Maupin, Claude B. John Maupin Jr., John R. Jorge M. Perez, Spence L. Harry W. Witt, Lee, J. Styslinger III and Marthqa R. Ingram, Matlock and McCrary. Michaep Fistel, a partner of Atlanta-based law firm , said shareholdet derivative lawsuits could likely increase agains t financial institutions given the current economic which hasn’t been kind to banks.