The parties to shareholder complaints against the deal between Capital Bank Financial Corp. and CommunityOne Bancorp moved to settle their respective cases,according to a Form 8-K filed April 7.
One of the cases — brought on behalf of a putative class of CapitalBank shareholders against Capital Bank, its directors and CommunityOne — reacheda stipulation of settlement April 4. That class filed a complaint against the twobanks alleging that CommunityOne aided and abetted the Capital Bank director defendantsin breaching their fiduciary duties and failed to disclose material informationrelated to the deal.
The parties of consolidated litigation from CommunityOne shareholdersfiled a memorandum of understanding in which the parties agreed on the terms ofa settlement of those lawsuits. The memorandum is still subject tocourt approval.
The suits on behalf of the putative class of CommunityOne shareholders,that were later consolidated, were filed in court on Feb. 29 and March 14 againstCommunityOne, its directors and Capital Bank. The plaintiffs in those two suitsalleged that certain defendants' disclosures were materially incomplete and misleading.
Both the stipulation of settlement and the MOU provide that CapitalBank and CommunityOne, respectively, will make certain supplemental disclosuresrelated to the merger. The agreements are not admissionsthat the initially filed proxy statements required further disclosures, and thedefendants agreed to the settlements "to avoid the uncertainty, costs, distractionand disruption inherent in litigation," the Form 8-K noted.