UnionBanCal Buyout of Pacific Capital Bancorp. Unfair, Shareholders Say
UnionBanCal Buyout of Pacific Capital Bancorp. Unfair, Shareholders Say
(CN) - Shareholders of Pacific Capital Bancorp filed a class action over an allegedly unfair $1.5 billion buyout deal with UnionBanCal.
"Put simply," the complaint states, "the defendants are using their control of the company to benefit themselves to the detriment of the company's public shareholders."
Montey alleges that shareholders will receive inadequate compensation for their shares in the buyout. She also claims that the transaction undervalues the company's stock and that the board failed to attempt to obtain the highest share price for all shareholders before agreeing to the sale, to benefit company chairman, billionaire Gerald J. Ford
"The deal is designed solely to benefit Ford, who owns approximately 76 % of the company. PCBC's operations are now profitable as the company reported net income of over $70 million for 201l. Similar positive results are expected for 20l2," the complaint states.
Bloomberg Business Week reports that Ford owns 25 million shares in Pacific Capital and estimates that he personally stands to gain $1.15 billion on his $500 million investment in the company.
Pacific Capital Bancorp, according to the complaint, has $5.9 billion in assets and is the parent company of Santa Barbara Bank & Trust, operates 47 branches.
UnionBanCal, meanwhile, has assets valued at $89.7 billion, according to the complaint. Its primary subsidiary is Union Bank which operates 414 branches in California, Washington, Oregon, Texas and New York, as well as two international offices. UnionBanCal is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group. Union Bank is California's forth largest bank by deposits as measured by the Federal Deposit Insurance Corporation, the lawsuit states.
Business Wire reports that Former United States Securities and Exchange Commission attorney Willie Briscoe and the securities litigation firm of Powers Taylor LLP are not far behind in their investigation of the sale while Market Watch reports that three other law firms Harwood Feffer LLP of New York City, Johnson & Weaver LLP of San Diego, Calif. and Brower Piven in Stevenson, Maryland, have initiated their own investigations.
The complaint was filed in the Superior Court of California in Santa Barbra by Keith Cochran and Francis A. Bottini Jr. of Chapin Fitzgerald Sullivan & Bottini LLP in San Diego.
"Put simply," the complaint states, "the defendants are using their control of the company to benefit themselves to the detriment of the company's public shareholders."
Montey alleges that shareholders will receive inadequate compensation for their shares in the buyout. She also claims that the transaction undervalues the company's stock and that the board failed to attempt to obtain the highest share price for all shareholders before agreeing to the sale, to benefit company chairman, billionaire Gerald J. Ford
"The deal is designed solely to benefit Ford, who owns approximately 76 % of the company. PCBC's operations are now profitable as the company reported net income of over $70 million for 201l. Similar positive results are expected for 20l2," the complaint states.
Bloomberg Business Week reports that Ford owns 25 million shares in Pacific Capital and estimates that he personally stands to gain $1.15 billion on his $500 million investment in the company.
Pacific Capital Bancorp, according to the complaint, has $5.9 billion in assets and is the parent company of Santa Barbara Bank & Trust, operates 47 branches.
UnionBanCal, meanwhile, has assets valued at $89.7 billion, according to the complaint. Its primary subsidiary is Union Bank which operates 414 branches in California, Washington, Oregon, Texas and New York, as well as two international offices. UnionBanCal is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group. Union Bank is California's forth largest bank by deposits as measured by the Federal Deposit Insurance Corporation, the lawsuit states.
Business Wire reports that Former United States Securities and Exchange Commission attorney Willie Briscoe and the securities litigation firm of Powers Taylor LLP are not far behind in their investigation of the sale while Market Watch reports that three other law firms Harwood Feffer LLP of New York City, Johnson & Weaver LLP of San Diego, Calif. and Brower Piven in Stevenson, Maryland, have initiated their own investigations.
The complaint was filed in the Superior Court of California in Santa Barbra by Keith Cochran and Francis A. Bottini Jr. of Chapin Fitzgerald Sullivan & Bottini LLP in San Diego.
Copyright Courthouse News Service 2012.
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