Item 1.02 Termination of a Material Definitive Agreement.
On May 13, 2021, Republic Bank & Trust Company's (the "Bank") entered into an
Asset Purchase Agreement (the "Purchase Agreement") with Green Dot Corporation
("Green Dot") related to the sale to Green Dot of substantially all of the
assets and operations of the Bank's Tax Refund Solutions business (the "Sale
Transaction").
On January 7, 2022, the Bank served Green Dot with formal notice of termination
of the Purchase Agreement pursuant to Section 7.1(c) of the Purchase Agreement,
and the Bank's demand that Green Dot pay the Termination Fee of $5 million
pursuant to Section 7.2(b) of the Purchase Agreement.
As provided by Section 7.2(a) of the Purchase Agreement, the Bank maintains that
the Bank's notice of termination of the Purchase Agreement and corresponding
request for the Termination Fee does not release Green Dot from any liability,
in addition to the Termination Fee, related to the Sale Transaction occurring
before the Bank's notice of termination. As a result, the Bank will continue to
seek the additional monetary damages and equitable relief arising from Green
Dot's actions in the litigation before the Delaware Court of Chancery described
below.
Background
On August 4, 2021, Republic Bancorp, Inc. (the "Company") disclosed that Green
Dot had delayed the closing of the Sale Transaction, following a request to
Green Dot from its primary regulator for information relating to the Sale
Transaction and Green Dot's subsequent decision to seek from its primary
regulator the approval of or non-objection to, as applicable, the Sale
Transaction before its consummation.
On October 4, 2021, Green Dot announced that it had been unable to obtain the
Federal Reserve's approval of or non-objection to the Sale Transaction due to
its undisclosed regulatory issues and that, as a result, Green Dot would not
consummate the Sale Transaction. On October 5, 2021, the Bank filed a lawsuit
against Green Dot in the Delaware Court of Chancery, C.A. No. 2021-0854-SG,
alleging breach of contract. In so doing, the Bank sought, among other relief,
specific performance to require that Green Dot proceed with the Sale
Transaction.
On December 2, 2021, the Delaware Court of Chancery denied the Bank's expedited
motion for summary judgment seeking the remedy of specific performance from
Green Dot of the Sale Transaction. As previously disclosed, as a result of this
ruling, the Bank no longer expected the Sale Transaction to be consummated.
Due to the inherent uncertainties of legal proceedings, the Company cannot
predict the outcome of these proceedings and their impact on the Company's
financial condition and results of operations.
Except as required by law, the Company does not assume any obligation to update
any forward-looking statement herein to reflect events or circumstances that
occur after the date hereof.
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