Twenty years after he helped launch one of the first companies to succeed in the new world of Internet banking, Matt Lawlor was forced out of his job as chairman/CEO of Online Resources Corp. by a board dissatisfied with the publicly held company’s financial performance.
Lawlor sued and last week won $5.3 million from a Fairfax County, Va., Circuit Court jury, but he said it wasn’t just about the money. The company announced his retirement in December 2009 and terminated his employment in February 2010 as the company reported quarterly and then annual losses.
"The implication is that there was some kind of performance issue here, but there really wasn’t. While we’ve had stronger years, our core earnings per share were up 50% in 2009, despite the recession and the collapse of the banking industry," Lawlor said.
"We were the first Internet banking company back in 1989, and there are a lot of pioneering people there who deserve some credit. I’m very proud of the innovation that took place at Online Resources," he said.
Online Resources grew quickly as Internet banking took off. The Chantilly, Va., company’s client list grew to hundreds of credit unions and other institutions as it moved into payments, direct billing and other channels.
"This was all about getting the record straight, for my career, and for other people at the company and hopefully it will all bear out in the appeals process, should the company choose to go that route," Lawlor said.
John Dorman, chairman of the Online Resources board of directors, said, "We are very disappointed in this verdict, and we intend to aggressively pursue all available avenues to have this verdict overturned or set aside."
The case actually began in Delaware where the company filed a preemptive claim saying there was effectively no change of control when Lawlor left, he said, and that the court then deferred to the case in Virginia.
Hedge fund Tennenbaum Capital Partners became a major owner of the company after it financed Online Resources’ acquisition of Princeton eCom in 2006.
The Fairfax County jury ruled in favor of Lawlor in four of the five claims he filed, rejecting his claim of wrongful termination but agreeing with claims of breach of his severance agreement and unjust enrichment on the part of the company.He had been seeking $15.9 million plus prejudgment interest.
The company had lost $4.2 million in the last fiscal year. First-quarter results were expected to be announced late last week.