SOURCE: Kaplan Fox & Kilsheimer LLP

December 10, 2010 20:00 ET

Kaplan Fox Files Securities Class Action on Behalf of Purchasers of Wilmington Trust Corporation Common Stock During the Period April 18, 2008 Through November 1, 2010

NEW YORK, NY--(Marketwire - December 10, 2010) - Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit against Wilmington Trust Corporation ("Wilmington Trust" or the "Company") (NYSE: WL) that alleges violations of the Securities Exchange Act of 1934 on behalf of purchasers of Wilmington Trust common stock during the period April 18, 2008 through November 1, 2010, inclusive (the "Class").

The case is pending in the United States District Court for the District of Delaware (Civil Action No. 10-1086). A copy of the complaint may be obtained from Kaplan Fox or the Court.

The Complaint alleges that, throughout the Class Period, Defendants misrepresented the true extent of the deterioration in its loan portfolio in press releases and its quarterly and annual filings with the Securities and Exchange Commission ("SEC") and that unknown to investors, during the Class Period, Wilmington Trust knowingly or recklessly failed to disclose that (1) its loan portfolio was impaired to a much larger extent than the Company had disclosed, (2) the Company had failed to properly record losses for its impaired assets by adequately provisioning for loan losses each quarter in light of its known concentrations of loans in the commercial sector and in the struggling Delaware region, and that as result of the foregoing, (3) the Company's financial statements were materially false and misleading and not prepared in accordance with GAAP, including overstating the value of the Company's assets, understating its provisions for loan losses and understating the Company's income tax expense; and (4) Defendants lacked a reasonable basis for their positive statements about the Company, its prospects and growth.

The Complaint further alleges that on November 1, 2010, Wilmington Trust shocked investors when it issued two related press releases. According to the Complaint, in the first press release, Wilmington Trust announced dismal results for the third quarter of 2010, reporting a loss of $365.3 million due in part to an additional $281.5 million loan loss provision and a $100.7 million income tax expense associated with a valuation allowance against the Company's deferred tax asset. The Complaint further alleges that the Company stated that a primary cause for the loss was continued deterioration in the Company's loan portfolio, reflecting the extent of the Company's exposure to real estate construction lending concentrated in Delaware, and that Wilmington Trust further stated that it had "little assurance" that its loan portfolio would strengthen significantly in the near term, or that the Company's capital position would not erode further. According to the Complaint, in the second press release, Wilmington Trust announced that it would merge with M&T Bank Corporation ("M&T") and that the two companies had already signed a definitive agreement. 

It is further alleged that under the terms of the merger agreement, Wilmington Trust common shareholders will receive 0.051372 shares of M&T common stock in exchange for each share of Wilmington Trust common stock and that at this conversion ratio, the transaction values each Wilmington Trust common share at a mere $3.84 per share representing what the Company claimed to be the tangible book value as of September 30, 2010, despite Wilmington Trust's shares closing at $7.11 per share on October 29, 2010, the last trading day before the announcement. 

Finally, the Complaint alleges that upon the release of the November 1, 2010 news, shares of the Company's common stock fell $2.90 per share, or more than 40%, to close at $4.21 per share on unusually heavy trading volume.

If you are a member of the proposed Class, you may move the court no later than January 18, 2011 to serve as a lead plaintiff for the Class. You need not seek to become a lead plaintiff in order to share in any possible recovery.

Plaintiff seeks to recover damages on behalf of the Class and is represented by Kaplan Fox & Kilsheimer LLP. Our firm, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions and actions involving financial fraud. For more information about Kaplan Fox & Kilsheimer LLP, or to review a copy of the complaint filed in this action, you may visit our website at www.kaplanfox.com

Contact Information

  • If you have any questions about this Notice, the action, your rights, or your interests, please contact:

    Pamela A. Mayer
    KAPLAN FOX & KILSHEIMER LLP
    850 Third Avenue, 14th Floor
    New York, New York 10022
    (800) 290-1952
    (212) 687-1980
    Fax: (212) 687-7714
    E-mail address: pmayer@kaplanfox.com

    Laurence D. King
    KAPLAN FOX & KILSHEIMER LLP
    350 Sansome Street, Suite 400
    San Francisco, California 94104
    (415) 772-4700
    Fax: (415) 772-4707
    E-mail address: lking@kaplanfox.com