Venezuela litigation
Bancor Group Inc. v. Rodriguez
Date: Aug. 31, 2026
Issue: Whether the district court erred in awarding Bancor Group Inc. and Stichting Particulier Fonds Franeker $800,000 and prejudgment interest in litigation tied to Eastern National Bank’s relationship with Banco de Venezuela.
Case Summary: In a unanimous decision, an Eleventh Circuit panel affirmed an $800,000 jury verdict ruling that two former Eastern National Bank directors breached their fiduciary duties by advancing the Venezuelan government’s interests and contributing to the bank’s financial losses.
In January 2022, minority shareholders of Eastern National Bank N.A., Bancor Group Inc., and Stichting Particulier Fonds Franeker sued former bank directors Gabina and Carlos Rodriguez (collectively, the directors), alleging they breached their fiduciary duties of care and loyalty. The dispute stemmed from the bank’s 2016 decision to open an account for Banco de Venezuela despite concerns from its chief compliance officer. The shareholders alleged Gabina acted as an agent of the Venezuelan government by controlling the board, funneling Venezuelan funds into the bank, and helping the government evade sanctions, while Carlos allowed that conduct to continue to the bank’s detriment. They also alleged the directors approved disabling the bank’s account-monitoring system, limiting the bank’s ability to monitor transactions tied to the Venezuelan account. The Office of the Comptroller of the Currency (OCC) later found deficiencies in the bank’s anti-money laundering controls and issued consent orders in 2018 and 2020. The shareholders alleged the bank failed to fix those problems as its financial condition worsened.
During discovery, the directors produced 31 OCC examination documents but later claimed they were privileged and sought to exclude them. Magistrate Judge Eduardo Sanchez of the Southern District of Florida rejected the privilege claim and allowed the shareholders to use the documents. The court also denied the directors’ Rule 403 challenge. The directors separately moved to dismiss for lack of standing, but Judge Gayles ruled the directors waived their judicial-estoppel defense by failing to raise it in their answer and failed to show that the doctrine applied under Florida law.
At trial, the jury found that Carlos and Gabina breached their duty of care and that Gabina also breached her duty of loyalty. The jury awarded $800,000 in damages. The court entered judgment for the shareholders, awarded prejudgment interest from Oct. 25, 2018, and denied the directors’ motion for a new trial. The directors appealed the district court’s decision.
On appeal, the panel ruled that the district court did not abuse its discretion by allowing the shareholders to use the OCC examination documents. The panel assumed that the bank examination privilege applied, but explained that courts may override it for good cause. The panel emphasized the documents were highly relevant because they showed that the OCC identified compliance failures, the directors knew about those failures, and they did not correct them. The panel also found that the documents provided evidence unavailable elsewhere, that the serious nature of the allegations supported disclosure, and that disclosure posed little risk of chilling future communications between banks and regulators. The panel thus upheld the district court’s decision to override the privilege.
Second, the panel determined that the district court properly denied the directors’ motion in limine, a pretrial request to exclude certain evidence, seeking to bar the OCC examination documents under Federal Rule of Evidence 403. The panel ruled the documents were highly probative because they showed the directors knew about possible fiduciary-duty violations and failed to act. It also ruled that the risk of unfair prejudice did not outweigh their probative value. The panel added that the district court reduced any potential prejudice by instructing the jury that regulatory violations alone did not establish liability and that it must consider all the facts and circumstances.
Third, the panel concluded that the district court properly rejected the directors’ proposed jury instruction on the burden of proof for corporate waste. The directors argued that the court’s business judgment rule instruction, which protects directors and officers from personal liability when courts review their business decisions, should have stated that the shareholders had to prove corporate waste by a preponderance of the evidence. The panel disagreed because the court separately told the jury that the shareholders had to prove each essential part of their claims by a preponderance of the evidence. The panel concluded the instructions correctly stated the law and did not mislead or prejudice the jury.
Fourth, the panel determined that the district court properly denied the directors’ motion to dismiss for lack of standing. The directors argued the minority shareholders could not claim ownership of the bank shares because their principal, who had an interest in the entity that held the shares, allegedly failed to disclose that interest during a bankruptcy filed years earlier. The panel ruled the directors waived their judicial-estoppel argument by admitting in their answer that the plaintiffs had standing and by failing to raise judicial estoppel as an affirmative defense.
Finally, the panel concluded the district court properly awarded prejudgment interest from the date of the 2018 consent order rather than the date the shareholders sued. The panel explained that Florida law allows prejudgment interest in certain tort cases when the loss is financial and can be tied to a definite date. The jury awarded $800,000 in damages, and the shareholders tied those losses to the directors’ failure to ensure the bank complied with the 2018 consent order.
Bottom Line: The Eleventh Circuit affirmed the $800,000 verdict and upheld the district court’s evidentiary, standing, jury-instruction, and prejudgment interest rulings.
Document: Opinion
