Lawyer for dissident investors says bank may fail
An attorney for dissident shareholders said Wednesday that First Asian Bank may fail before an annual meeting June 25. But a district judge apparently wasn't convinced and stopped a shareholder meeting planned for Wednesday night.
Clark County District Judge Elizabeth Gonzalez granted a temporary restraining order against a special shareholder meeting scheduled by dissident shareholders, including founding Chairwoman Dee Mallas and former Chief Executive Officer William Chu.
Defense attorney James Whitmire, who represented Mallas and others, said the bank was in trouble because of actions taken by the board majority.
"The (shareholder meeting) needs to happen and needs to happen now," Whitmire told the judge. "This is a ship without a rudder. It's a sinking ship perhaps."
Plaintiffs' attorney Harold Gewerter, who represents the board majority, disagreed.
"It's absolute nonsense," Gewerter said. "There is no basis for the defendant to say that, other than to try and wrest control (of First Asian) from the plaintiffs."
Board member James Yu said the bank was in good shape. He is one of the five-member board majority that the defendants are battling for control of the bank. The dissident shareholders wanted to hold a meeting to replace directors.
After the hearing, Gewerter said his clients posted a $250,000 bond that Gonzalez required for the temporary restraining order.
George Burns, commissioner of the Nevada Financial Institutions Division, on May 28 fined First Asian Bank $20,000, criticizing the bank for operating without a CEO and for disclosure of confidential information about a regulatory exam.
The order says that First Asian fired Chu on May 7 and is operating without a CEO. The order says that First Asian failed to notify the division of this change. Burns also alleges that unidentified directors committed a criminal misdemeanor by disclosing confidential information of a regulatory exam.
First Asian, which claims to be the first Asian bank in Southern Nevada, opened a year ago.
It has $10 million in capital but lost $610,000 in the first quarter. The bank has $34 million in assets and $23.3 million in deposits.
Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.
