Banking

Delaware court obstructs Republic’s quote to require Green Dot to purchase tax system

A Delaware court has actually declined a quote by Republic Bancorp in Louisville, Kentucky, to need Green Dot to finish the purchase of Republic’s tax-refund company in the face of regulative objections.

The $6.2 billion-asset Republic acknowledged Friday that the tax-refund company line’s sale to Green Dot, a pre-paid card provider in Pasadena, California, won’t be consummated. However, Republic stated it would continue to pursue a different legal difficulty for breach of agreement.

The $4.4 billion-asset Green Dot concurred in May to pay $165 million for the Republic system, which uses advance loans and other services to customers through an across the country network of third-party tax-preparation services. Three months later on, Green Dot revealed it was postponing the sale, which was set up to close in the 4th quarter, after getting concerns from the Federal Reserve. Green Dot eventually called the offer off when it stopped working to acquire the Fed’s approval or nonobjection to the deal.

In a filing Friday with the Securities and Exchange Commission, Republic stated that the Delaware Court of Chancery declined to purchase the conclusion of the sale in a viewpoint bied far a day previously. The court discovered the threat to Green Dot of regulative action — consisting of civil and criminal charges — exceeded the damage to Republic occurring from the supposed breach of agreement.

Republic did not information what’s next for the tax-refund company. CEO Steve Trager decreased to comment beyond the SEC filing other than to state “we remain passionately committed to the tax business that has been great for us over the last 30 years.”

Green Dot prepares to continue purchasing its existing tax-processing platform, the business stated in an e-mail to American Banker.

“We’re disappointed the transaction couldn’t move forward, but this does not change our” strategies, Alison Lubert, vice president of business interactions, stated in the e-mail. “We’ll continue executing on our strategy to grow the business, leveraging its strong reputation, differentiated product set and exceptional client experience.”

Green Dot went into the tax-processing company in 2014 with its $320 million acquisition of Santa Barbara Tax Products Group.



Gabriel

A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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