Fixed-income specialist Sovran Capital Management, a management subsidiary of Bank of
America located in Richmond, Virginia has initiated a suit against
eight former employees and their new start-up firm, Agincourt Capital Management. The suit, filed on October 1, alleges that the former employees breached their fiduciary responsibilities by making arrangements to start their own company and soliciting clients while still employed
Named in the lawsuit is Bradley Coats, president of Agincourt, Patrick O’Hara, managing director, Lewis Duncan Buoyer, Patrick Kelly, William Armes, William Putnam and Brian Scott Marshall, analyst. At the time of their departure from the firm, the eight employees were in discussions with Bank of America regarding a management buy-out of Sovran. How those talks were progressing is a matter of interpretation. What is clear, however, is that on the morning of September 22, the employees in question resigned from their posts and within hours had announced the formation of their new firm.
“Contrary to some reports, Bank of America did not break off those discussions and the bank was prepared to continue with them in order to reach an agreement mutually agreeable to both sides”, said a BofA spokesman, adding that “bank officials involved believed that they had entered into serious discussion to establish a
joint venture agreement. Agincourt’s Coats says what was in contention was BofA’s plans to merge its investment management units together, including Sovran. That was something that would not have been acceptable them or in the best interests of their clients”, Coats said.
The lawsuit has not derailed Agincourt’s business plan. Coats says Agincourt already has 20 clients signed up, but would not say if they were all former Sovran clients. Tom Marsh