Financially troubled Butterfield Equities Corp. has been sued for almost $25 million by two former executives who claim they were wrongfully terminated earlier this year. Both men were highly paid managers, together drawing more than $300,000 a year in salary and other compensation from the company.
Butterfield is a diversified financial services company in Santa Ana that operates Butterfield Savings & Loan Assn., a restaurant division and a real estate investment division. It has lost $27.8 million in the 21 months ended March 31, largely from its S&L; operations, and reportedly has been under pressure from state and federal S&L; regulators to end its expansion plans and reduce its operating costs.
The wrongful-termination suits were filed separately in Orange County Superior Court by Ray Johnston, who was hired away from Campbell Soup Co. with great fanfare last year to head Butterfield Equities' restaurant division, and Bruce Birkeland, who was hired from a San Francisco mortgage banking company in 1984 to run Butterfield S&L;'s new loan office.
"I came out here totally committed to developing and enhancing Butterfield's restaurant business because I thought the company was totally committed to that. Here at the end we find they are not," Johnston said in an interview Friday. Johnston was hired to operate Butterfield's Love's restaurant chain and the holding company's Wendy's hamburger franchise, which included a dozen restaurants.
Johnston left his job at Campbell Soup in New Jersey, to run Butterfield's Hospitality Division. He said his three-year contract called for $200,000 a year salary, lucrative benefits and up to $40,000 for an automobile.
The 43-year-old executive said Friday that he was not given any notice and had never been told that Butterfield management was unhappy with his work during his eight-month tenure. "They walked in on April 26 and told me I was finished. . . ," he said.
The suit filed by Birkeland, Butterfield S&L;'s former $100,000-a-year executive vice president for loans, alleges that Butterfield S&L; wrongfully fired him on March 21 after 10 months of employment.
Birkeland's attorney said the former loan officer believes he was fired because he objected to "certain loan policies and procedures which he believed may have been improper." Birkeland's suit, filed on April 29, asks for more than $15 million. Butterfield has denied Birkeland's allegations in a document filed in court.
Butterfield officials could not be reached for comment Friday.