SOURCE: Izard Nobel LLP

February 23, 2009 19:03 ET

Izard Nobel LLP Announces Class Action Lawsuit Against Colonial BancGroup, Inc.

HARTFORD, CT--(Marketwire - February 23, 2009) - The law firm of Izard Nobel LLP, which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Middle District of Alabama on behalf of those who purchased or otherwise acquired the securities of The Colonial BancGroup, Inc. (NYSE: CNB) ("Colonial" or the "Company") between January 23, 2008 and January 27, 2009, inclusive (the "Class Period").

The Complaint charges that Colonial, and certain of its officers and directors, violated federal securities laws. Specifically, defendants issued materially false and misleading statements regarding the Company's business and financial results, and concealed the Company's failure to properly account for its troubled loan portfolio and goodwill.

On January 27, 2009, the Company announced its fourth quarter and full year 2008 financial results, including a net loss of $825 million for the quarter due, in substantial part, to a $575 million goodwill impairment charge, a $415 million charge to write off troubled assets and an increase to its loan loss reserve. Colonial further disclosed that its receipt of funds from the U.S. Treasury's Capital Purchase Program was conditioned upon Colonial raising an additional $300 million in equity. On this news, Colonial's stock dropped from $1.58 per share on January 27, 2009 to $0.85 per share on January 28, 2009. During the Class Period, Colonial's stock traded as high as $16.06 per share in February 2008.

If you are a member of the class, you may, no later than April 10, 2009, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members.

While Izard Nobel LLP has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, and your rights, visit: www.izardnobel.com/colonialbancgroup/, or contact Izard Nobel LLP toll-free: (800) 797-5499, or by e-mail: firm@izardnobel.com. For more information about class action cases in general, please visit our website: www.izardnobel.com.

Contact Information

  • CONTACT:
    Nancy A. Kulesa or Wayne Boulton
    (800) 797-5499
    Email Contact