Court rejects Republic effort to force deal with Green Dot

A court in Delaware has rejected a request by Republic Bancorp to force Green Dot to buy its tax refund solutions business to the Louisville, Ky., banking company.

The $6.2 billion-asset Republic disclosed in a regulatory filing that the Delaware Court of Chancery on Thursday denied its expedited motion for summary judgment that tried to make the transaction happen.

The court determined that the risk of regulatory action, including criminal and civil penalties, against Green Dot and its officers and directors, outweighed the harm to the bank tied to Green Dot’s alleged breach of contract. 

“As a result of this ruling, the bank does not expect the sale transaction to be consummated,” the filing said. “The ruling does not otherwise impact the bank’s lawsuit against Green Dot alleging breach of contract with respect to the sale transaction.”

Republic said it will continue to pursue damages and other equitable relief against Green Dot. 

Green Dot agreed in mid-May to buy the business to Republic for $165 million. 

Republic said in October that the deal collapsed due to undisclosed issues with Green Dot’s primary regulator. 

Republic filed its lawsuit on Oct. 5, contending that Green Dot failed to disclose the existence of any regulatory issues that would cause a delay in closing. The bank also claimed that approval from the Federal Reserve “is not a contractual condition to closing,” as defined by the purchase agreement.