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Law Offices of Howard G. Smith, Representing Investors of Green Bankshares, Inc. Announces Class Action Lawsuit

^{Published on 2010-11-19 18:20:47 - Market Wire}
 

BENSALEM, Pa.--([ BUSINESS WIRE ])--Law Offices of Howard G. Smith, representing investors of Green Bankshares, Inc. (aGreen Banksharesa or the aCompanya) (Nasdaq:GRNB), has filed a class action lawsuit in United States District Court on behalf of a class (the aClassa) consisting of all persons or entities who purchased the securities of Green Bankshares between January 19, 2010, and November 9, 2010, inclusive (the aClass Perioda). The class action lawsuit was filed in the United States District Court for the Eastern District of Tennessee. Green Bankshares operates as the bank holding company for GreenBank, which provides commercial banking services primarily in Tennessee.

"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."

The Complaint charges the Company and certain of its executive officers with violations of federal securities laws. The Complaint alleges that 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 Companya™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 Companya™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 Company 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 Companya™s Fixed Rate Cumulative Perpetual Preferred Stock, Series A, issued to the U.S. Treasury Department. Further, the Company disclosed that atwo large relationships totaling approximately $31.4 million, after charge-offs of $20.7 million,a had defaulted during the third quarter. According to the Company, athese 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.a

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.

No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased Green Bankshares securities between January 19, 2010, and November 9, 2010, you have certain rights and have until January 18, 2011, to move for lead plaintiff status. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215)638-4847, Toll-Free at (888)638-4847, by email to [ howardsmith@howardsmithlaw.com ] or visit our website at [ http://www.howardsmithlaw.com ].