According to a press release dated May 12, 2010, the complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results and engaged in improper behavior that harmed BancorpSouth’s investors by failing to disclose the extent of seriously delinquent commercial real estate loans and construction and land loans. The Company also failed to adequately and timely record losses for its impaired loans, causing its financial statements to be materially false. As a result of defendants’ false statements, BancorpSouth’s stock traded at artificially inflated prices during the Class Period, reaching a high of $25.13 per share on October 14, 2009.
On February 25, 2010, after the market closed, BancorpSouth announced that it would be postponing the filing of its Form 10-K with the SEC for the year ended December 31, 2009, in order to further review its allowance for credit losses and their impact on the Company’s results. BancorpSouth further reported that based on its review, it expected to adjust its previously reported financial results for the quarter and year ended December 31, 2009 to decrease net income. On this news, BancorpSouth’s stock fell $3.10 per share to close at $19.47 per share on February 26, 2010, a one-day decline of over 13% on high volume, and a decline of 23% from the stock’s Class Period high.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) defendants failed to properly account for BancorpSouth’s construction and commercial real estate loans, failing to reflect impairment in the loans; (b) defendants had not adequately reserved for BancorpSouth’s loan losses such that its financial statements were presented in violation of Generally Accepted Accounting Principles; and (c) the ompany failed to maintain proper internal controls related to its accounting for its loan loss reserves.
On August 3, 2010, Magistrate Judge John S. Bryant signed the Order appointing Edward B. Winslow as Lead Plaintiff and approving Lead Plaintiff's selection of law firm of Robbins Geller Rudman & Dowd LLP and Dyer & Berens LLP as Co-Lead Counsel and Barrett Johnston, LLC as Liaison Counsel. The Consolidated Amended Complaint was filed on September 17, 2010. The defendants responded by filing a motion to dismiss on November 15, 2010.
On April 26, 2011, Magistrate Judge John S. Bryant signed the Report and Recommendation that the defendants' motion to dismiss be denied. In January 24, 2012, the Court issued an Order accepting and approving the Report and Recommendation. The defendants' motion to dismiss is denied.
On June 1, 2012, the parties gave notice to the Court that they have reached an agreement to settle this case, subject to Court approval.
On June 5, 2012, the Court issued an Order that the action is dismissed without prejudice to the right, upon good cause shown within sixty (60) days, to reopen the action if the settlement is not consummated.
On July 11, 2012, the Court issued an Order Preliminarily Approving Settlement and Providing for Notice.
On October 31, 2012, the Court issued an Order Approving Plan of Allocation of Settlement Proceeds. The Court also issued an Order approving attorneys' fees and expenses. Finally, the Court entered a Final Judgment and dismissed this case with prejudice.