Item 3. Legal Proceedings
Item 3.
Legal Proceedings
We are not currently subject to any material legal proceedings. We are from time to time subject to claims and litigation
arising
in
the
ordinary
course
of
business.
These
claims
and
litigation
may
include,
among
other
things,
allegations
of
violation of banking and other applicable regulations, competition
law, labor laws and consumer
protection laws, as well as
claims or
litigation
relating
to intellectual
property,
securities, breach
of contract
and tort.
We
intend to
defend ourselves
vigorously against any pending or future claims and litigation.
The
Company
previously
disclosed
that
litigation
(the
“Litigation”)
had
been
commenced
on
July
13,
2023
by
three
individuals
who
were
shareholders
of
the
Bank
prior
to
the
Bank’s
reorganization
into
the
holding
company
form
of
organization in 2021
(the “Plaintiffs”)
against six
persons, all
of whom were
directors of
the Bank at
the relevant
time (the
“Defendants”), in the Circuit Court, Eleventh Judicial Circuit for Miami-Dade County, Florida (the “Court”) (Benes et al. v. de
la
Aguilera
et
al.)
alleging
the
Defendants
(i) caused
the
Bank,
as
directors
thereof,
to
engage
in ultra
vires
conduct by
devising
and
approving
the
exchange
transaction
effected
in
July
2021
pursuant
to
which
the
Bank’s
then
outstanding
shares of Class C and Class D preferred stock was exchanged for shares of Class A voting common stock in the
Bank (the
“Exchange Transaction”),
which action
the Plaintiffs
allege was
not permitted
by the
Bank’s Articles
of Incorporation,
and
(ii) breached
their
fiduciary
duty as
directors
of the
Bank
by
approving
and
engaging
in
the
Exchange
Transaction.
The
Plaintiffs sought the
Court to certify the
action as a class
action and to award
damages in an
amount to be
proven at trial.
Plaintiffs
sought
damages
exceeding
$750,000
plus
attorney’s
fees
and
costs
as
well
as
such
other
relief
as
the
Court
determined to award.
The Defendants filed a motion to dismiss the Litigation with
prejudice (the “Motion”). On December 27, 2023, the Court,
after reviewing
the Motion,
the Plaintiff’s response
thereto and
the Defendant’s reply
as well
as the
oral arguments presented
by
the
parties
on
December
14,
2023,
granted
the
Motion,
dismissing
the
Litigation
with
prejudice
and
rendering
final
judgment in favor of the Defendants. The Court reserved jurisdiction
to award costs or grant any post-judgment relief.
There can be no
assurance that any
future legal proceedings
to which we are
a party will not
be decided adversely
to
our interests and have a material adverse effect
on our financial condition and operations.
Item 4.
Mine Safety Disclosures
Not applicable.
Table of Contents
47
USCB Financial Holdings, Inc.
2023 10-K
PART II