Xenith Bankshares, Union Bankshares Hit with Securities Lawsuit

New to ClassAction.org? Read our Newswire Disclaimer

Xenith Bankshares Inc., its board of directors, and Union Bankshares Corporation are facing a securities lawsuit filed by a Xenith shareholder who claims the defendants filed a misleading registration statement regarding a proposed merger between the two companies. The suit argues that the defendants omitted material information from the statement, including details concerning the two companies’ financial projections and figures used in the valuation analyses performed by their financial advisors – Sandler O’Neill & Partners, L.P. and Keefe, Bruyette & Woods, Inc. (KBW). The case takes further issue with the statement's supposed non-disclosure of potential conflicts of interest among said advisors and Xenith’s board of directors. In particular, the complaint argues:

“The Registration must fully disclose the circumstances surrounding the Board’s engagement of Sandler O’Neill, including whether it was due to a perceived conflict of interest of KBW, and whether KBW informed the Board or Company management that it had also met with and advised the Union board of directors.”

Regarding the board members, the suit argues that the defendants must disclose the timing and nature of communications around the benefits that Xenith executives stand to receive in the transaction, including promises of future employment with the new company and a combined total of $7 million in bonuses.