Resnick Sues Imperial Credit Over Ouster
Judy L. Resnick, one of Southern California’s highest-profile female financiers, sued Imperial Credit Industries and its chairman Wednesday for $25 million in damages, claiming they fraudulently seized control of Dabney Resnick Imperial, the company she co-founded.
According to the lawsuit filed in Los Angeles County Superior Court, Torrance-based Imperial and its chairman, H. Wayne Snavely, along with Dabney executives Randy Wooster and Jason Reese, “knowingly conspired together to wrongfully oust Resnick from participation in the firm after exploiting her business contacts and . . . eliminate her as a competitor.”
Dabney Resnick Imperial now operates under the name Imperial Capital, a subsidiary of Imperial Credit, a publicly traded diversified financial services company formed in 1991.
Imperial’s executives called the suit “frivolous” and “without merit.”
“In the wake of disappointing financial performance, Ms. Resnick, who remained chairperson of Dabney Resnick Imperial, resigned in May 1997 as chief executive officer and relinquished day-to-day management responsibility,” the company said in a statement.
“Now that Imperial Capital is a successful, well-capitalized company, Ms. Resnick has apparently decided to reconstruct the facts in an attempt for personal financial gain.”
Resnick, 56, got her start as a junk bond trader with Michael Milken at Drexel Burnham Lambert in Beverly Hills during the 1980s. She left in 1989 to co-found brokerage firm Dabney Resnick, which she and Neil Dabney, another former Drexel trader, grew into a firm with $25 million in revenue, 125 employees and an asset management division.
Dabney left in 1996, and later that year Imperial Credit agreed to loan the firm $8.45 million in return for a 1% stake and warrants to buy an additional 49%. At the time, Resnick controlled 50% of the firm and had no intention of selling her stake, the suit claims. Last April, Dabney Resnick suffered a series of setbacks, including losing a costly lawsuit, the suit also claims. Resnick then began to “require direct supervision and scrutiny of all investment banking deals,” which sparked hostility, the suit says.
In May, Resnick agreed to give up management responsibilities but remain chairman for a $400,000 annual salary. She also agreed to give her remaining equity stake to Imperial and allow it to remove her name from the firm, the suit states.
But just a few days before the firm’s Christmas party, Resnick learned she would not keep the chairman title, when business cards were passed out to everyone in the office but her, the suit says.
In the months previous, the suit said, Resnick was “systematically excluded” from meetings by the defendants and they “removed a Forbes magazine feature article on Resnick titled ‘I Didn’t Know I Was Oppressed,’ which had always been displayed in the main conference room, and put it in storage.”
“She’s trying to protect herself and her clients and a firm that she spent a better part of her life building,” said Peggy Garrity, the Santa Monica lawyer representing Resnick.
On Wednesday, Imperial Credit’s stock was up 47 cents a share to close at $19.50 a share on Nasdaq.
