The original Complaint alleges that during the Class Period, the Company and the individual defendants falsely portrayed the Company as relatively immune from the effects of the global credit crisis and stated that the Company’s capital position remained strong and loan portfolio was solid. In actuality, the Company was practically insolvent at all relevant times and needed to sell assets at fire-sale prices and raise capital at extraordinarily high rates to remain viable. Moreover, the Company’s balance sheet was impaired by billions of dollars of poorly performing assets the Company acquired when it purchased ABN AMRO in October 2007.
The magnitude of the Company’s severe liquidity crisis first became apparent on September 29, 2008, when the governments of three separate countries (Netherlands, Belgium, and Luxembourg), agreed to bail-out the Company so long as it would sell its troubled stake in ABN AMRO. Published reports indicated that Fortis’s sale of ABN AMRO would net considerably less than Fortis had paid for it just months ago. The deal would have given the three European nations a 49% stake in the Company. The emergency infusion was in the form of 11.2 billion euros ($16.9 billion). This unprecedented move, however, was not enough to stem Fortis’ continued decline.
On Saturday, October 4, 2008, it was reported that the Dutch government took over Fortis’ operations for 16.8 billion euros ($23 billion) in a deal that came less than a week after the Netherlands, Belgium, and Luxembourg had agreed to invest 11.2 billion euros in Fortis. News that the famed financial giant was in ruins and required nationalization further punished Fortis’ already bruised stakeholders.
On October 14, 2008, Fortis traded on the Brussels exchange at the lowest levels that it had ever seen since it was formed 18 years ago, after selling most of its operations to three governments and BNP Paribas SA. Fortis, which resumed trading after a six-day suspension, declined 78 percent to 1.22 euro, valuing the Company at 2.86 billion euros ($3.91 billion).
On February 3, 2009, District Court Judge Denny Chin appointed the Labourers' Pension Fund of Central and Eastern Canada and the Employees' Retirement System of the Government of the Virgin Islands as lead plaintiffs and appointed Coughlin Stoia Geller Rudman & Robbins LLP as lead counsel. On May 18, 2009, the lead plaintiffs filed an Amended Class Action Complaint. On July 22, 2009, the defendants filed motions to dismiss the Amended Class Action Complaint. On February 18, 2010, Judge Denny Chin dismissed the complaint with prejudice. Judgment was entered on February 22, 2010, and the case is now closed. The plaintiffs filed a motion for reconsideration of the Judgment, which was later denied.