Thursday, May 30, 2002
Peoples freezes Finnan
Ex-president says he won't use credit line
By Patrick Crowley, Pcrowley@enquirer.com
The Cincinnati Enquirer
Former Peoples Bank of Northern Kentucky president John Finnan has decided not to use a $100,000 line of credit at the bank, likely avoiding a lawsuit filed by his former employer.
After a Kenton County circuit judge earlier Wednesday granted a temporary restraining order preventing Mr. Finnan from using the funds, he agreed not to spend the money, his lawyer John Schuh said late Wednesday.
Finnan has agreed not to use a line of credit which the bank had made available to him in 1999, and the bank has agreed to dismiss the suit, Mr. Schuh said.
Lawyers for the bank confirmed the agreement.
Kenton Circuit Judge Gregory Bartlett granted a request by Peoples to forbid Mr. Finnan from spending $100,000 drawn from a line of credit. A month ago, Mr. Finnan was president of the six-office Crestview Hills bank.
That was before bank directors forced him and another officer to resign for their involvement in the collapse of the Erpenbeck Co., the Tristate's fourth-biggest home builder.
Peoples asked Judge Bartlett for an order temporarily barring Mr. Finnan from spending the money drawn after his April 1 dismissal. The credit line had been available to Mr. Finnan as a member of Peoples' board of directors.
The bank filed suit against its former president last week, claiming that he knowingly breached his fiduciary duties to Peoples by allowing Mr. Erpenbeck to exceed his borrowing limit at the bank and for doing business on the side with Mr. Erpenbeck without the knowledge of the bank's board.
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the Erpenbeck Co. or Peoples Bank of Northern Kentucky - or
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The bank had alleged that Mr. Finnan deceived the board and benefited financially through his business relationship with Mr. Erpenbeck.
It also claimed that Mr. Finnan approved the payment of $1.2 million in checks from Mr. Erpenbeck when he did not have funds to cover the amount. Approving the checks constituted a loan and put Mr. Erpenbeck over his legal borrowing limit of $6 million, the bank claims.
Cincinnati lawyer Richard Goldberg said Mr. Finnan arranged for the overdrafts to be covered through a secured loan taken out by Mr. Erpenbeck's father, Anthony Erpenbeck.
John Finnan is sad and disappointed that this bank he led for 10 years, successfully led for 10 years, has questioned his loyalty, said Mr. Goldberg, who is representing Mr. Finnan.
He always acted in the bank's best interest, he said.
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