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SunTrust ordered to pay $4 million for breach of agreement


The Atlanta Journal-Constitution
Published on: 07/14/08

A federal judge ordered SunTrust Banks to pay $4 million to a California poultry producer Monday after ruling that the bank breached a confidentiality agreement while lending money to a rival.

Judge Oliver W. Wanger, at the federal district court in Fresno, Calif., entered the monetary judgment against the Atlanta-based bank Monday after ruling in January in favor of Foster Farms, California's largest chicken producer.

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A spokesman for SunTrust declined to comment or say whether the bank plans to appeal the decision.

Employees in SunTrust's San Francisco office had provided a letter of credit to Foster Farms to buy the chicken business of its largest rival, Zacky Farms, in 2001, said Carmine Zarlenga, a Washington, D.C., attorney who represented Foster Farms in the case. Wanger ruled that SunTrust then used Foster Farm's confidential information when it decided to loan money to Zacky Farms, based in El Monte, Calif.

SunTrust "made money by doing both deals," said Zarlenga. He said SunTrust later closed its San Francisco office, which had focused on agribusiness lending.

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