Voyager's former CEO says he was unjustly ousted, but bank says he wrongfully took millions.
Eden Prairie's Voyager Bank accused its former longtime CEO of bilking it out of nearly $15 million in personal loans Tuesday, after the ousted CEO sued for wrongful termination and accused the bank of using him as a scapegoat for the bad decisions of others.
Voyager, one of the state's larger community banks, has been losing money and fired longtime CEO Tim Owens in August. Officials never explained the departure except to say that it involved potential loan losses, and the dispute remained mostly behind closed doors.
On Tuesday, Owens filed a suit accusing the bank, holding company Voyager Financial Services Corp. and a number of insiders of wrongful termination, breach of fiduciary duty and defamation, among other things. In his complaint, he said he was encouraged to borrow money from the Voyager companies to acquire Voyager shares, as did a number of board members and shareholders.
The Voyager companies fired back within hours and accused him in court filings of lying and manipulating them to get nearly $15 million to maintain a lifestyle that included a $4.5 million Lake Minnetonka home as well as a $2.5 million lake cabin and other luxuries, including Bentley and Aston Martin cars.
The bank also claims Owens funneled more than $5 million in loan proceeds to his wife and that the money is unaccounted for.
Owens, 51, of Wayzata, said that after a 2010 heart attack, the bank and other defendants conspired to use him as a scapegoat for bad decisions that hurt bank profits, oust him and gain control of his Voyager stock at historically depressed prices. It wrongfully fired him "for cause" on July 12, he said, terminating his salary and health insurance benefits, and defamed him by telling shareholders and others that he was the reason the bank needed to raise additional capital in 2011.
Owens said that one of the Voyager loans was given to him in exchange for signing a noncompete agreement, and that the debt was supposed to be forgiven as long as he didn't violate the agreement.
Owens' lawyer, Richard Ostlund, said that none of the bank's allegations were part of the original notice it sent Owens last summer telling him to pay off all his loans in 10 days or he would be terminated "for cause."
"These allegations by Voyager have been dredged up by these defendants to excuse their own failure to act properly as officers and directors," Ostlund said.
The companies argue that Owens obtained the loans through deception, hiding correspondence from regulators, fabricating a document and forging the chairman's signature, as well as lying about his financial condition, according to the motion.
Owens defaulted and left the bank holding the bag, they charge.
According to the motion, the debts included a series of loans totaling about $5 million made directly from the holding company to Owens, and letters of credit securing payment of loans he got from two other banks -- $7.5 million from Alliance Bank and $2.2 million from Tradition Capital Bank. Voyager paid off the $9.7 million Owens owed those banks.
Things began unraveling in September 2010 after the Minnesota Department of Commerce examined the bank and identified "various violations of banking laws and regulations based on the loans made to Owens."
Owens was unable to repay the loans. Last June, a group of state and federal bank regulators, accompanied by a lawyer from the state attorney general's office, attended a bank board meeting. Shortly after, the board voted to terminate Owens for cause.
"I had hoped that Tim and his lawyer would reach some sort of amicable settlement with us, and it didn't happen," said Bill Dunkley, chairman of Voyager Financial Services Corp., in an interview.
An attorney for the bank said Owens' employment contract includes a clause requiring disputes to be settled outside of court in arbitration.
Jennifer Bjorhus • 612-673-4683