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Photo by James Sanna | Banker & Tradesman Staff
A bank shareholder known for filing merger-related lawsuits has targeted the proposed deal between Cambridge Trust Co. and Wellesley Bank.
Paul Parshall, a serial lawsuit-filer who recently challenged mergers involving People’s United Bank and Berkshire Bank, filed a putative derivative and class action lawsuit against Wellesley Bank and Cambridge Trust on his own behalf and that of other Wellesley shareholders in the Circuit Court for Baltimore City, Maryland.
According to SEC 8-K reports submitted by Cambridge Trust and Wellesley Bank, Parshall claimed that the Wellesley board of directors had breached its fiduciary responsibilities in approving the terms of the merger, that the merger considerations were inadequate and that the proxy document detailing the merger contained incomplete disclosures.
Cambridge Trust and Wellesley Bank denied wrongdoing but agreed to release additional information about the merger to supplement the proxy document. According to the 8-K report, the plaintiff as a result agreed to “dismiss the merger litigation with prejudice as to their individual claims and without prejudice to the claims of the putative members of the class.”
The additional disclosures by the banks included more detailed financial information about Wellesley’s peer group, which the financial adviser, then known as Sandler O’Neill and Partners, had used when issuing its opinion to Wellesley’s board about the merger.
The banks indicated in the SEC report that the litigation would not affect the merger plans. Wellesley Bank holds its shareholder meeting to vote on the merger on March 12. Cambridge Trust holds its meeting on March 16.
