$35 Million Claim for Damages Filed Against Royal Bank Unit by RealHome.com.Business Editors STAMFORD, Conn.--(BUSINESS WIRE)--Nov. 1, 2001 (RealHome.com, Inc.) - A $35 million breach of contract claim has been filed against Royal Bank of Canada's Liberty Life Insurance subsidiary by RealHome.com, Inc., a U.S. based holding company which owns the leading homeowner membership group in the U.S., the American Homeowners Association (AHA)(R). In addition to breach of contract, the suit alleges breach of duty, diversion of business to an affiliated company, misappropriation misappropriation n. the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any of proprietary information, and other misconduct by Liberty Life during an exclusive contractual marketing agreement between Liberty and AHA. Both compensatory and punitive damages Monetary compensation awarded to an injured party that goes beyond that which is necessary to compensate the individual for losses and that is intended to punish the wrongdoer. are sought in the suit, which was filed under the rules of the American Arbitration Association The American Arbitration Association (AAA) is a private enterprise in the business of arbitration, and one of several arbitration organizations that administers arbitration proceedings. The AAA also administers mediation and other forms of alternative dispute resolution. . Toronto-based Royal Bank of Canada Bank of Canada Canada's central bank, established under the Bank of Canada Act (1934). It was founded during the Great Depression to regulate credit and currency. The Bank acts as the Canadian government's fiscal agent and has the sole right to issue paper money. , which changed its name to RBC RBC red blood cell. RBC or rbc abbr. red blood cell RBC, n See red blood cell count. RBC red blood cells; red blood (cell) count (see blood count). Financial Group (RBC) in August, 2001, is Canada's largest bank as measured by total assets. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. analysts, RBC has been on an acquisition spree in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in the past year (The Wall Street Journal, October 10, 2001). Royal Bank of Canada views the U.S. as a critical component to its future growth, since Canadian regulatory authorities have balked balk v. balked, balk·ing, balks v.intr. 1. To stop short and refuse to go on: The horse balked at the jump. 2. at its Canadian expansion plans in recent years, fearing a concentration of banking powers, as CNNfn recently reported. In addition to its acquisition of Liberty Life Insurance of Greenville, SC, RBC bought regional brokers Dain Rauscher Wessels of Minneapolis and Tucker Anthony Sutro of Boston, which will be folded into Dain Rauscher to form the 9th largest brokerage in the U.S. RBC also acquired Centura Banks of Rocky Mount, NC and Prism Mortgage in Chicago, IL. As a result of these acquisitions, RBC Financial Group now has over 10,000 employees in the United States. The acquisition of Tucker Anthony Sutro is subject to approval by Canadian and U.S. regulatory authorities and shareholders of Tucker Anthony Sutro. "In the process of the acquisition of Liberty by Royal Bank of Canada, significant contractual promises to our company were breached, and other significant damage was caused to our business," said Richard J. Roll, Founder and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of the American Homeowners Association. "It raises the question of whether U.S. regulators should permit any additional acquisition of U.S. companies by RBC until this and any other comparable matters have been fully investigated by them," said Mr. Roll, who has previously testified before both the U. S. Senate and House Banking Committees in support of banking reforms which have since been passed into law. Liberty Life Insurance continues to remain one of several institutional shareholders of RealHome.com, Inc., which is based in Stamford, CT. The RealHome holding company also owns and operates RealHome.com, the #1 Gomez ranked web site for first time and novice homebuyers and sellers, and various other interactive media businesses. The claims, if upheld, would represent almost 15% of RBC's third quarter net income. "RBC is a fine organization but needs to realize it cannot ride roughshod over contractual commitments while furthering its expansion objectives in the U.S.," stated Roll. "Sometimes when a company is growing as rapidly as RBC, they fail to exercise good judgment and cause damage in their wake. When a company produces damages such as this, they must be held accountable," Roll said. |
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