Vernon and Shirley Hill settle workers’ pension claims for $3 million

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Vernon Hill, the Moorestown banker, and Shirley Hill, who worked closely with the three banks he ran, agreed to pay more than $3 million to settle lawsuits over the Hills’ investment in the retirement savings of employees of InterArch, Shirley Hill’s design company, in Vernon Hill’s bank stocks, which have lost most of their value.

The government said in an August 30 federal lawsuit that the Hills concentrated InterArch’s profit-sharing plan retirement investments in Metro Bank and Republic First Bancorp during the years 2016 through 2020 and failed to diversify as required by federal pension law, “even though the stock prices of Metro Bank and Republic Bank have both fluctuated.

These shares ultimately lost $21 million in value from their highest price under the plan until they were sold at very favorable prices.

The settlements represent only a fraction of the losses declared by the government. The Hills have agreed to pay members of the InterArch benefit-sharing plan $1.84 million and $184,000 in penalties to resolve the federal civil complaint, according to a statement from Cristina O’Brien, the top U.S. department official. of Labor in Philadelphia.

Hills attorney Jeffrey I. Pasek of Cozen O’Connor declined to comment. Both men agreed not to contest the Labor Department’s complaint that they broke the law in their handling of the plan and “caused financial loss” to its participants.

Shirley Hill will bear much of the loss: most of the plan’s assets had been set aside and invested for her benefit, but she will not receive any of the additional payments. The settlement money will go to 26 other InterArch employees, said Lenore Uddyback-Fortson, a spokeswoman for the department.

The Hills also agreed to pay $1.5 million to resolve a private class action lawsuit on behalf of former InterArch employees, according to the Labor Department.

Before being sued, the Hills also contributed $1 million to the plan in 2020, again to benefit other employees. This means that, with the settlement funds, the pair will have enriched the depleted plan by more than $4 million since the sale of the devalued bank shares.

In their consent order, the two men also agreed to bar again from serving as pension trustees and appoint a new independent trustee by September 30 to distribute the remaining money in the plan and shut it down.

The government had alleged the couple engaged in personal dealings and breached their obligations to the plan by making large and risky investments in Vernon Hill banks.

According to the settlement, Shirley Hill was the sole trustee of the pension plan, and she and Vernon Hill both served as trustees, bound under federal law to invest workers’ money in the best interests of workers, not their.

The plan was founded in 1976, as Vernon Hill accelerated its expansion of Commerce Bank from a small South Jersey lender to a 400-branch banking giant on the East Coast.

Commerce was sold to TD Bank in 2008, after Hill agreed to leave under pressure from regulators and administrators. Hill then launched Metro, in London, then took over Philadelphia-based Republic First, operator of Republic Bank.

Shirley Hill’s InterArch designed the distinctive look of the three banks, with glass walls, multiple tellers, bright red lettering logos and other distinctive features that Vernon Hill said were integral to the success of the businesses to attract client.

Hill was kicked out as boss of Republic First Bancorp – the largest bank still based in Philadelphia with more than $5 billion in assets and 36 branches – after losing control of the board following the death of an ally on the board this summer.

Even with Hill gone, the bank remains the subject of contention among its major shareholders. On Friday, a group led by George Norcross, the South Jersey political fundraiser, president of Cooper Health and insurance broker, offered to buy majority control of the bank and put the former chief executive in charge. of TD Bank, Gregory Braca.

Republic First is now run by Hill’s predecessor, Harry Madonna, and has hired consultants to review its strategy and price its eventual sale.

The Norcross group and Madonna allies had criticized Hill’s ambitious growth plans for the bank, at a time when other lenders have mostly closed branches, without opening new ones.

A previous attempt by Norcross Group to buy control of the bank while it was under Hill’s management last winter failed.

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