CASES
Green Bankshares, Inc.
Class Period: Jan 19, 2010 to Nov 9, 2010
Lead Plaintiff Deadline: Jan 18, 2011 + Deadline passed
Summary of Case:
A securities class action has been filed against Green Bankshares, Inc. (GRNB) ("GRNB" or the "Company") on behalf of all securities purchasers from January 19, 2010 through November 9, 2010, inclusive ("Class Period"), in the United States District Court for the Eastern District of Tennessee.
The complaint alleges that defendants knew or recklessly disregarded that their public statements concerning Green Bankshares, Inc.'s business, operations and prospects were materially false and misleading. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company was overvaluing the collateral of certain loans; (2) that, as such, the Company was failing to timely take impairment charges to reduce the carrying values of certain loans to appropriate market values; (3) that the Company lacked adequate internal and financial controls; and (4) that, as a result, the Company's financial results were materially false and misleading at all relevant times.
On October 20, 2010, Green Bankshares announced its financial results for the 2010 fiscal third quarter and disclosed that the Company's net charge-offs increased on a sequential basis to $36.5 million from $4.9 million in the prior quarter. Moreover, the Company indicated that it had engaged an independent third-party loan reviewer, which contributed to the asset quality-impact reflected in its third quarter results. On this news, shares of the Compnay declined $2.79 per share, more than 43%, to close on October 21, 2010, at $3.68 per share, on unusually heavy volume.
Then, on November 9, 2010, after the market closed, the Company announced that in consultation with the Federal Reserve Bank of Atlanta, Green Bankshares had given notice to the U.S. Treasury Department that the Company was suspending the payment of regular quarterly cash dividends on the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury Department. Further, the Company disclosed that "two large relationships totaling approximately $31.4 million, after charge-offs of $20.7 million," had defaulted during the third quarter. According to the Company, "these borrowers had been paying interest only and were current but new appraisals ordered during the quarter showed collateral shortfalls that caused the Company to move these relationships to non-accrual and charge them down to the collateral values."
As a result of this news, shares of the Company declined $1.08 per share, more than 29.5%, to close on November 10, 2010, at $2.57 per share, on unusually heavy volume.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.