According to a press release dated March 11, 2009, the complaint alleges that the representations contained in Corus’ press releases, SEC filings, conference calls, and presentations during the Class Period were materially false and misleading when made because they failed to disclose: (i) that Corus was failing to recognize losses on its condominium loans in accordance with generally accepted accounting principles (“GAAP”); (ii) that Corus and/or its affiliates was purchasing condominiums in developments Corus had financed in an attempt to: (a) inflate the appraised values of condominiums to delay having to recognize losses on financing for such condominiums; (b) inflate developers’ sales figures to increase the likelihood of successful future sales; and (c) create the illusion of successful sales histories in order to inflate appraisal values for the condominiums to ensure inflated future prices for the condominiums; and (iii) that Corus was involved in detailed and in-depth negotiations with the Federal Reserve Bank of Chicago and the Office of the Comptroller of Currency regarding its deteriorating pool of condominium loans.
On January 30, 2009, Corus released partial financial results for fiscal 2008 and stated that “Corus is suffering from the extraordinary effects of what may ultimately be the worst economic downturn since the Great Depression.” Upon this announcement, shares fell nearly 47% to close at $.59 per share on February 2, 2009, on heavy trading volume in excess of two million shares.
According to the Minute Order dated June 17, 2009, the Honorable Elaine E. Bucklo appointed Todd L. Johnson as lead plaintiff and approved Coughlin Stoia Geller
Rudman & Robbins LLP as lead counsel and Miller Law LLC as liaison counsel. On August 3, 2009, the lead plaintiff filed a Consolidated Class Action Complaint. On October 1, 2009, the defendants filed a motion to dismiss the Consolidated Class Action Complaint.
On April 6, 2010, the Honorable Elaine E. Bucklo granted in part and denied in part the defendants’ motion to dismiss. According to the Order, Corus’s motion to dismiss is denied, except with respect to Count I’s section 10(b) claim against Corus’s Chief Financial Officer.
On June 18, 2010, a Suggestion of Bankruptcy was filed as to Corus Bankshares, Inc. On July 17, 2010, a Stipulation of Dismissal was filed as to defendant Corus Bankshares, Inc. According to the Stipulation, the Lead Plaintiff’s claims in the Consolidated Class Action Complaint for Violation of the Federal Securities Laws against Corus are voluntarily dismissed, without prejudice. The court is now awaiting the plaintiffs motion for class certification.
On May 17, 2011, an unopposed motion to preliminarily approve the settlement was filed. According to the Stipulation of Settlement, the proposed settlement is in the amount of $10 million to be paid by the company's insurer. The settlement was preliminarily approved on June 2, 2011. The fairness hearing was set for September 12, 2011.
On September 12, 2011, the Honorable Elaine E. Bucklo approved the settlement and the plan of allocation, and awarded attorneys’ fees of 19.5% of the Settlement Fund and payment of expenses in an aggregate amount of $200,000. The case is now closed.