Commercial Record photo / file
Waterbury-based Webster Bank and New York-based Sterling National Bank face seven lawsuits challenging their proposed merger and have disclosed additional information about the deal in response to the legal actions.
Webster Bank said in an SEC 8-K filing that the banks believed that the claims in the lawsuits did not have merit and denied that additional disclosures were required or necessary. The banks decided to release additional information in part to avoid delaying the merger, the filing said.
Among the allegations in the lawsuits were claims that the registration statement relating to the proposed merger was incomplete and misleading.
“Webster, Sterling and the other named defendants deny that they have violated any laws or breached any duties to Webster’s stockholders or Sterling’s stockholders, as applicable,” the filing said. “Nothing in this current report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, Webster and Sterling specifically deny all allegations in the matters that any additional disclosure was or is required.”
In addition to avoiding delays in the merger, the banks said they released additional information to minimize the costs, risks and uncertainties associated with litigation.
Six of the lawsuits were filed by Sterling Bancorp shareholders in federal court. Another lawsuit was filed in Connecticut Superior Court against Webster Financial Corp. Sterling also received demand letters from counsel representing individual stockholders, the SEC filing said.
The new disclosures included additional information about how the naming of the board of directors would be handled and financial information used in the deal.
Lawsuits against mergers are common, and the plaintiffs included serial litigant Paul Parshall.
Webster Bank and Sterling National Bank are combining in an all-stock transaction valued at approximately $10.3 billion. Shareholder of both companies will vote on the merger-of-equals transaction in special meetings on Aug. 17.
