According to the press release dated November 19, 2010, the complaint alleges that defendants knew or recklessly disregarded that their public statements concerning Green Bankshares’ business, operations andprospects were materially false and misleading. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (i) that the Company was overvaluing the collateral of certain loans; (ii) that, as such, Green Bankshares was failing to timely take impairment charges to reduce the carrying values of certain loans to appropriate market values; (iii) that the Company lacked adequate internal and financial controls; and (iv) that, as a result, the Green Bankshares’ 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 Q3 and disclosed that the Company’s net charge-offs increased on a sequential basis from $4.9 million in the prior quarter to $36.5 million. Furthermore, Green Bankshares indicated that it had engaged a third-party loan reviewer, which contributed to the asset quality-impact reflected in its Q3 results. As a result of this news, shares of the Company declined more than 43% to close at $3.68 per share on October 21, 2010.
On November 9, 2010, Green Bankshares announced that in consultation with the Federal Reserve Bank of Atlanta, the Company had given notice to the U.S. Treasury Department that Green Bankshares 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. Moreover, Green Bankshares disclosed that two large relationships totaling approximately $31.4 million had defaulted during Q3. On this news, shares of Green Bankshares declined more than 29.5% to close at $2.57 per share on November 10, 2010.
On February 4, 2011, Judge Curtis L. Collier consolidated two related actions. On February 11, 2011, Movant Jeffrey Blomgren was approved as lead plaintiff. On May 3, 2011, the plaintiffs filed a Consolidated Amended Class Action Complaint. The defendants responded by filing a motion to dismiss on July 11, 2011.
On October 16, 2012, the Court issued an Order Preliminarily Approving Settlement and Providing for Notice of Proposed Settlement.
On March 25, 2013, the Court issued a Final Judgment and ordered this case dismissed with prejudice.