SOURCE: Kaplan Fox & Kilsheimer LLP

February 12, 2009 16:33 ET

Kaplan Fox Seeks to Recover Losses for Investors Who Purchased Colonial Bancgroup, Inc. Common Stock

NEW YORK, NY--(Marketwire - February 12, 2009) - Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit in the United States District Court for the Middle District of Alabama against Colonial Bancgroup, Inc. ("CNB" or the "Company") (NYSE: CNB) and certain of its officers that alleges violations of the Securities Exchange Act of 1934 on behalf of all persons or entities who purchased the common stock of CNB between December 2, 2008 and January 27, 2009 (the "Class").

The Complaint alleges that in a press release on December 2, 2008, CNB stated that it would receive $550 million from the United States Treasury Department in connection with the Troubled Asset Relief Program ("TARP").

The Complaint further alleges that in a press release on January 27, 2009, the Company announced an $825 million loss in the fourth quarter of 2008 and an $880 million loss for the full year of 2008. In that same press release, the Company disclosed that the $550 million it was to receive from TARP was actually contingent upon CNB's ability to raise an additional $300 million in capital from outside investors (a fact that CNB did not previously disclose). In response to this news, it is alleged that the Company's stock price dropped from $1.58 per share on January 27, 2009, to $0.85 per share on January 28, 2009, a drop of $0.73 per share, or approximately 46%, on unusually heavy trading volume.

The Complaint alleges that the Company's December 2, 2008 press release was materially false and misleading because it failed to disclose the material fact that the $550 million that the Company was to receive from TARP was contingent upon the Company's raising $300 million on its own.

If you are a member of the proposed Class, you may move the court no later than April 10, 2009 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 e-mail us at mail@kaplanfox.com or contact:

    Joel B. Strauss
    Jeffrey P. Campisi
    Aviah Cohen Pierson
    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: mail@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: mail@kaplanfox.com