A six-year-old lawsuit involving a now-defunct Columbus-owned bank may have finally been resolved.
Senior Judge Sarah Evans Barker of the United States District Court, Southern District, on March 31 ruled in favor of three former executives of Irwin Union Bank & Trust Co. who had been accused of not fulfilling their fiduciary duties. Barker dismissed the final two of seven original charges against the former bank executives.
But despite the victory in court, one of the defendants in the lawsuit said it’s possible the matter could linger.
“If it’s over, that is obviously a relief,” said former Irwin Union Bank & Trust Co. CEO Will Miller during a phone interview from his New York City office. “But I don’t know. They still have the right to appeal.”
After the bank lost more than $450 million over a year and a half, federal regulators stepped in Sept. 18, 2009, and shut down all 27 Irwin Union branches.
Two years later, in 2011, bankruptcy trustee Elliot Levin sued Miller, the bank’s former Chief Financial Officer Gregory Ehlinger and former Executive Vice President Thomas Washburn.
Seeking more than $500 million in damages, Levin accused the defendants of seven breaches of fiduciary duty by issuing a large volume of what Levin described as inherently risky real estate loans.
Although Barker dismissed the suit in 2012, an appeals court reinstated two of Levin’s original seven charges.
The defendants failed to provide accurate and reliable information to the bank’s board of directors.
The defendants surrendered millions of dollars worth of capital contributions to regulators even as the bank was headed for failure.
But in her March 31 ruling, Barker determined the defendants fully satisfied their fiduciary duties, the board members exercised their own business judgment, and the former executives only carried out the board’s wishes.
It was one of two legal actions Irwin Union bank officers have faced.
After filing a 2013 lawsuit against former officers Bradley Kime, Duncan Burdette, Michael Waters and Kim Roerig, the Federal Deposit Insurance Corp. announced a $15 million settlement last year.
For the son of the late Columbus industrialist J. Irwin Miller, Levin’s accusations struck Will Miller on both a personal and professional level. The financial institution was founded in 1871 by his great-great grandfather, Joseph Irwin, Miller said.
A week after Barker’s decision, Miller said he no longer holds any bitterness regarding the litigation. Nevertheless, he does acknowledge an FDIC list that places Irwin Union as the 118th of 465 U.S. banks failing between 2008 to 2012.
Miller said he did make mistakes, as did thousands of others in the national banking industry.
“Hopefully, we’ve all leaned that in extreme circumstances, things that used to offset one another can go down at the same time in ways that nobody anticipates,” Miller said.
Miller said he doubted a repeat of the 2008 financial crisis could happen again.
“It’s very rare that the same things happen twice,” he said. “It’s usually a whole new surprise that creates a crisis.”
It has been almost six years since Miller moved from Columbus to New York City, where he serves as president of the Wallace Foundation.
His organization is dedicated to improving learning and enrichment for disadvantaged children, and fostering the vitality of the arts.
However, Miller said the lawsuit’s resolution is making him think about his hometown friends and neighbors more than usual.
“I really appreciated the support from the community,” Miller said. “So many in Columbus were very helpful during the entire process, and I’ll always be grateful.”
