Court denies First Horizon’s request to block recruiting by M C Bank

A federal judge has denied First Horizon Bank’s request for an injunction that would have immediately barred former executive Karl Hoefer and DMMS Holdings from recruiting First Horizon employees. DMMS is the investor group led by former IberiaBank executives that recently merged with Morgan City-based M C Bank & Trust.

U.S. District Judge Brian Jackson issued the ruling May 29 in a lawsuit First Horizon filed in Baton Rouge federal court on Feb. 20 against Hoefer and DMMS. First Horizon alleges Hoefer violated nonsolicitation agreements by helping recruit dozens of First Horizon employees to the new-look M C Bank.

First Horizon sought a preliminary injunction that would have prohibited further recruiting efforts through May 2027 while the case proceeded. Jackson declined to grant that request.

Central to the ruling is the language contained in a series of incentive award agreements Hoefer entered into while employed at First Horizon—agreements First Horizon argued prohibited Hoefer from soliciting its employees.

In his ruling, Jackson found that the agreements do not explicitly prohibit solicitation. Instead, they provide that Hoefer would forfeit certain financial awards or be required to repay them if he chose to recruit First Horizon employees.

M C Bank on Monday issued a statement celebrating the ruling, with Daryl Byrd, M C Bank’s CEO and chair, describing Hoefer and the rest of his team as “elated.”

The lawsuit itself has not been dismissed. Jackson denied only First Horizon’s request for a preliminary injunction.

The case stems from First Horizon’s allegation that DMMS recruited at least 27 of its employees, many of them former IberiaBank bankers, in an attempt to “get the band back together.” Read more about the lawsuit here.

As part of an aggressive regional expansion strategy, M C Bank is preparing to enter the Baton Rouge market. Plans call for executive offices and two retail banking locations.