SOURCE: Brower Piven, A Professional Corporation

September 22, 2010 13:35 ET

Brower Piven Announces Class Action Lawsuit in Connection With the Acquisition of Student Loan Corporation by Citibank, N.A.

STEVENSON, MD--(Marketwire - September 22, 2010) -  Brower Piven, A Professional Corporation announces that a class action lawsuit has been commenced in the Court of Chancery in the State of Delaware on behalf of all shareholders of Student Loan Corporation ("Student Loan" or the "Company") (NYSE: STU). 

The complaint alleges that Student Loan's board of directors have agreed to sell Student Loan to a group that includes Student Loan's majority owner, Citibank, N.A. ("CBNA") ("Buyout") on terms that allegedly are unfair to the Company's shareholders.

According to the complaint, Student Loan is 80% owned by CBNA. In the Buyout, CBNA will acquire approximately $8.7 billion of Student Loan's assets, SLM Corporation ("Sallie Mae") will acquire $28 billion of assets, and Discover Financial Services ("Discover") will acquire $4 billion of assets and become the owner of Student Loan's private student loan business.

The complaint alleges that the underpriced Buyout is being foisted on Student Loan's public shareholders because CBNA is in desperate need to raise cash and divest non-core banking assets in the short term. According to the complaint, through the Buyout, CBNA and its corporate parent, Citigroup Inc. ("Citigroup"), will unload nearly $40 billion in student loans from its books and take in $1.8 billion in cash. The complaint also alleges that CBNA/Citigroup's self-interested needs to satisfy orders from regulators to downsize, raise cash and focus on its core consumer banking business has harmed Student Loan public shareholders, as the Buyout provides public shareholders with just $30 cash per share, representing a significant discount to the Company's book value, even though most of the Company's student loans are guaranteed by the U.S. government.

The complaint further alleges that under the terms of the Buyout, CBNA has agreed to sell Student Loan for substantially less than it is worth in order to serve its own self-interests, to the harm of the Company's public shareholders, while cherry-picking its own purchase of Student Loan assets that it can sell to private investors.

If you are a current owner of shares of The Student Loan Corporation you may obtain additional information about this lawsuit by contacting Brower Piven at www.browerpiven.com, by email at piven@browerpiven.com, by calling 410/415-6701, or at Brower Piven, A Professional Corporation, 1925 Old Valley Road, Stevenson, Maryland 21153. Attorneys at Brower Piven have combined experience litigating securities and class action cases of over 50 years. If you choose to retain counsel, you may retain Brower Piven without financial obligation or cost to you, or you may retain other counsel of your choice. You need take no action at this time to be a member of the class.

Contact Information

  • CONTACT:
    Charles J. Piven
    Brower Piven, A Professional Corporation
    Stevenson, Maryland
    410/415-6701
    Email Contact