The Bank of Napa offers businesses and consumers a range of products and services in California’s Napa County, with a focus on small and medium-sized businesses, professionals, and not-for-profit groups. On July 31, 2017, a proposed transaction was announced in which the Bank of Marin Bancorp and Bank of Marin would acquire the Bank of Napa. The complaint for this class action alleges that the Form S-4 Registration Statement for the transaction omits a great deal of information that renders the statement misleading and prevents shareholders from making an adequate assessment of the transaction.
The class for this action is public stockholders of the Bank of Napa.
The Form S-4 Registration Statement was filed with the Securities and Exchange Commission (SEC) on September 15, 2017. However, the complaint alleges that it omits information in at least three important categories.
Financial Projections: The complaint claims that the Registration Statement omits information on financial projections as well as the analyses performed by Sandler O’Neill & Partners, Napa’s financial advisors.
For example, the complaint claims that the Registration Statement does not make any financial projections for Napa, Marin, or the proposed combined company, even though Sandler apparently made such analyses and used them in determining that the merger consideration is fair. Also, in many places, the complaint alleges that the Registration Statement speaks of using “certain internal financial projections” or “certain assumptions” in arriving at its conclusions but does not explicitly say what those projections or assumptions are.
The complaint alleges that figures and amounts used for a long list of other calculations are also not provided, rendering opaque sections such as the Net Present Value Analyses, Comparable Company Analyses, Analysis of Selected Merger Transactions, Pro Forma Merger Analysis, and Opinion of Napa’s Financial Advisor. The complaint charges that this absence of concrete information prevents shareholders from determining whether Sandler’s final figures and recommendations are reasonable or fair.
Sandler’s Potential Conflicts of Interest: Sandler has disclosed the total fee arranged with Napa, and it has admitted that at least some of this fee is contingent on the transaction going through. The complaint alleges that if shareholders do not know how much of the fee is contingent, they cannot evaluate Sandler’s potential conflict of interest in recommending the deal.
Conflicts of Interest of Napa’s Officers and Directors: The Registration Agreement mentions a post-transaction consulting position with Marin for Napa’s CEO and an employment agreement with Marin for a Napa Executive Vice President, but it does not make the required disclosures as to make full disclosures of the timing and nature of all communications regarding these offers, including who first proposed them and who participated in all communications. This omission does not allow shareholders to assess the extent to which personal considerations have influenced Napa’s board.
According to the complaint, all of these omissions amount to violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and the SEC’s Rule 14-9.
Article Type: LawsuitTopic: Securities
Most Recent Case Event
Bank of Napa Misleading S-4 Registration Statement Complaint
October 6, 2017
The Bank of Napa offers businesses and consumers a range of products and services in California’s Napa County, with a focus on small and medium-sized businesses, professionals, and not-for-profit groups. On July 31, 2017, a proposed transaction was announced in which the Bank of Marin Bancorp and Bank of Marin would acquire the Bank of Napa. The complaint for this class action alleges that the Form S-4 Registration Statement for the transaction omits a great deal of information that renders the statement misleading and prevents shareholders from making an adequate assessment of the transaction, in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and the SEC’s Rule 14-9.
bank_of_napa_merger_s-4_complaint.pdfCase Event History
Bank of Napa Misleading S-4 Registration Statement Complaint
October 6, 2017
The Bank of Napa offers businesses and consumers a range of products and services in California’s Napa County, with a focus on small and medium-sized businesses, professionals, and not-for-profit groups. On July 31, 2017, a proposed transaction was announced in which the Bank of Marin Bancorp and Bank of Marin would acquire the Bank of Napa. The complaint for this class action alleges that the Form S-4 Registration Statement for the transaction omits a great deal of information that renders the statement misleading and prevents shareholders from making an adequate assessment of the transaction, in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and the SEC’s Rule 14-9.
bank_of_napa_merger_s-4_complaint.pdf