Republic in Ky. sues Green Dot after a deal falls through

Republic Bancorp in Louisville, Ky., has filed a lawsuit against Green Dot after a plan to sell its tax refund solutions business to the prepaid card issuer fell through. 

The $6.2 billion-asset Republic disclosed in a regulatory filing Tuesday that the deal collapsed due to “undisclosed issues” with Green Dot’s primary regulator. Republic said it believes all the conditions established in the purchase agreement would have been satisfied. 

The lawsuit was filed on Oct. 5 in the Delaware Court of Chancery.

Green Dot had been seeking approval from the Federal Reserve.

Republic contends that Green Dot failed to disclose the existence of any regulatory issues that would cause a delay in closing. The bank also claims that approval from Green Dot’s regulator “is not a contractual condition to closing” as defined by the purchase agreement. 

Republic said its lawsuit is looking to require Green Dot to move ahead with the purchase.

The companies announced the planned sale in mid-May, with Green Dot agreeing to buy the business for $165 million. 

Republic disclosed on Aug. 4 that Green Dot had delayed the closing after the card issuer’s regulator requested information tied to the deal. Republic also said that Green Dot had decided to seek approval or a non-objection from its primary regulator.