2 National City shareholders file lawsuits over sale
Days after getting merger news about National City Corp., shareholders sued the bank in Pittsburgh and Delaware courts over its $5.6 billion deal with PNC Financial Services Group.
A lawsuit filed in federal court in Pittsburgh by shareholder Martin Sheerer on Monday accuses the Cleveland bank of fraud by misrepresenting its condition in the months prior to the deal with PNC last Friday. National City statements and omissions "induced" Sheerer and "thousands of unsuspecting shareholders" to buy or hold their stock, then were hurt by the stock's continued decline.
The lawsuit seeks damages it wants the court to determine at trial. It also seeks designation as a class action of shareholders who, such as Sheerer, bought the stock since May 1.
Sheerer claims National City misstated the adequacy of its loan-loss reserves, and failed to disclose the bank's exclusion from a government program to bolster capital and its key regulator's order that National City find a buyer instead.
A National City spokesman could not be reached for comment.
PNC will pay National City holders $2.23 a share in a deal expected to close by yearend. PNC is being assisted by selling $7.7 billion in preferred shares to the U.S. Treasury as part of the agency's bank recapitalization plan.
Another shareholder sued National City in federal court in Wilmington, Del., alleging it breached its fiduciary duty by failing to obtain a better deal. PNC's offer is "unfair and grossly inadequate," said the lawsuit. It also accuses CEO Peter Raskind of "self-dealing," and objects to golden parachutes totaling over $41 million for the banks top three executives.
PNC spokesman Brian Goerke declined to comment.
Meantime, U.S. Rep Steven LaTourette, a Republican in suburban Cleveland, asked the Treasury Department and a House committee to investigate the deal. He said John Dugan, comptroller of the currency, steered the $7.7 billion to PNC, noting that Dugan earlier served at a Washington law firm which represented PNC in 2005.
Comptroller spokesman Robert Garrson said Dugan also once represented National City. "I don''t know why anybody would suggest he'd favor one over the other," Garrson said.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Route 19 accident in Mt. Lebanon injures five people
- Newkirk replaces Jones in Pitt’s starting lineup vs. Notre Dame
- Rooney says Pittsburgh is ‘good place’ for next northern Super Bowl
- Dungy, Greene represent more Steelers ties in hall of fame voting
- HOF finalist Bettis ‘behind everything’ in 2005 Super Bowl run
- Ambridge fire brought quickly under control
- UPMC researcher who died of cyanide poisoning committed suicide
- $800K spent to revamp California University of Pa. president’s home
- LaBar: WWE not backing down from controversy
- Pa. Treasurer McCord resigns without explanation, to leave Feb. 12
- Police: Woman thwarted abduction at Jefferson Township convenience store