(The Tyler-based American State Bank is not the American State Bank which operated in Lubbock before it was bought in 2012 by Prosperity Bank.)<\/p>\n
In 2023, Centennial sued Holmes and others \u2013 claiming violations of the federal Defend Trade Secrets Act, breach of contract, unfair competition and a few other things. Holmes said the information was public.<\/p>\n
ASB is no longer in West Texas.<\/p>\n
Federal regulators put ASB on their radar. In March 2024, the bank agreed to submit a plan to the federal reserve to \u201cimprove the bank\u2019s condition.\u201d That included credit risk management. (Click here to read it<\/a>.)<\/p>\n One of its two parent companies, Steele West Texas Capital Corporation, filed for Chapter 7 bankruptcy last year. Chapter 7 is for a business that cannot afford to pay its creditors and is also known as liquidation bankruptcy.<\/p>\n Holmes eventually became an executive vice president with another bank with locations in West Texas including Lubbock.<\/p>\n The battle impacted real people \u2013 for example Angie Castillo, the owner of Three Dog Bakery. She lost her business which we detail in this related story<\/a>. <\/p>\n ASB and attorneys for Holmes have chosen not to respond to more than one request to comment. Centennial also chose not to respond to a request.<\/p>\n Happy State deal \u2013 a \u2018bank in a box\u2019<\/p>\n Centennial Bank reached a tentative settlement in March with Holmes and other former HSB employees. Terms were not disclosed.<\/p>\n In that lawsuit, Centennial claimed Holmes was angry after the merger \u2013 thinking he should have received higher compensation \u2013 and sought \u201crevenge.\u201d<\/p>\n According to Centennial\u2019s lawsuit, Holmes accessed various spreadsheets containing Happy State Bank\u2019s \u201cmost valuable and sensitive\u201d confidential information.<\/p>\n According to the lawsuit, Holmes packed all this information together \u2013 such as loan information, operations, revenues, profits, losses, employee compensation, customer information and so forth. Centennial called it a \u201cready-to-use \u2018Bank in a Box.\u2019\u201d<\/p>\n Centennial claimed almost all the employees prioritized by Holmes left HSB for ASB within days of Holmes\u2019s departure.<\/p>\n Holmes denied wrongdoing \u2013 especially the taking of trade secrets.<\/p>\n In his legal filing, Holmes claimed, \u201cEven assuming such material can be considered a trade secret, Holmes discovered them by independent means and relationships without breaching any legal duties or using other improper means. \u2026 Further, the information is in the public domain.\u201d<\/p>\n According to another court document, Holmes and other defendants asked for logs and data from Digital Guardian \u2013 a company Centennial used \u2013 \u201cthat would show if and when any of the defendants copied, deleted, or transferred any file on Happy\u2019s computer system.<\/p>\n Centennial admitted, \u201c\u2026 It failed to retain any logs from Digital Guardian at all.\u201d<\/p>\n An expert witness for several defendants filed a statement saying Centennial misunderstood innocent activity (such as moving and deleting emails at the request of the bank\u2019s I.T. department) as evidence of wrongdoing.<\/p>\n ASB collapse in West Texas<\/p>\n Steele West Texas Capital Corporation filed for bankruptcy in February 2024. In April of this year, the bankruptcy trustee proposed a settlement \u2013 approved about a month later by a judge in Tyler.<\/p>\n The settlement request said in 2022, ASB \u201ccaused the formation\u201d of a company called Steele West Texas Capital Corporation. The company offered up to $83.1 million of common stock for $1,000 per share.<\/p>\n \u201cASB\u2019s attempted expansion into the West Texas Market was unsuccessful in large part due to inadequate capital to fund operations in West Texas and ASB ultimately closed the West Texas [locations] and separated from the former Centennial employees.\u201d<\/p>\n legal documents<\/p>\n \u201cUltimately, SWTCC raised $37,965,000 \u2026 and issued 37,965 shares of SWTCC stock to approximately 130 investors,\u201d the settlement request said. So, ASB was about $45 million short to support its plan.<\/p>\n \u201cASB\u2019s attempted expansion into the West Texas Market was unsuccessful in large part due to inadequate capital to fund operations in West Texas and ASB ultimately closed the West Texas [locations] and separated from the former Centennial employees.\u201d<\/p>\n Holmes was among those who lost their jobs with ASB. They also stand to lose much of the value of their investments in the failed ASB expansion.<\/p>\n Holmes invested $411,000, according to the bankruptcy claims register.<\/p>\n Steele West Texas Capital already had a 7 percent ownership of ASB in the form of non-voting stock. Under the terms of the settlement, that number went to just under a third. Based on the ASB\u2019s FDIC report, investors get more than half the equity value of their investment back \u2013 at least on paper. The actual cash value could be significantly less.<\/p>\n Really complicated settlement<\/p>\n Even after everyone came to a settlement in March, according to court records, it couldn\u2019t be wrapped up at that time.<\/p>\n \u201cThe settlement of this action is, and continues to be, complex,\u201d a joint request in the lawsuit from Centennial and ASB said.<\/p>\n Centennial was to get paid from \u201c\u2026 insurance companies for defendants and a payment to be made in the future by a financial institution that is not a party to this case \u2026\u201d<\/p>\n The other \u201cfinancial institution\u201d is Texas Capital Bank, which sued Steele Bankshares \u2013 one of ASB\u2019s two parent companies \u2013 in an unrelated case in Dallas County. Texas Capital won a judgment, which then led to a court-supervised sale of shares in Steele Bankshares.<\/p>\n Court records said Texas Capital Bank \u201c\u2026 agreed to make a payment to Centennial based on certain contingencies \u2026\u201d<\/p>\n Last month both sides in the Centennial lawsuit said those contingencies (including developments in bankruptcy court with the 130 shareholders we mentioned earlier) are solved.<\/p>\n![\"Happy](\"https:\/\/www.newsbeep.com\/us-tx\/wp-content\/uploads\/2025\/10\/happy_state_bank_1929x1080.jpg\")
19th Street at Quaker Avenue Credit: Staff photo<\/p>\n
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