Wolf Popper LLP
Centerline Holding Company
On February 15, 2008 Wolf Popper LLP filed a class action lawsuit against Centerline Holding Complany and certain of its officers and directors on behalf of investors who purchased Centerline common stock on the open market between March 12, 2007 through December 28, 2007 alleging claims of securities fraud.
The Complaint alleges that during the Class Period Defendants failed to disclose that they were in the process of structuring a sale of Centerline's mortgage revenue bond portfolio to a third party. On December 28, 2007, the Company shocked the market by its announcement that Centerline had sold its “$2.8 billion tax-exempt affordable housing bond portfolio” to Federal Home Loan Mortgage Corporation , and in the process, altered the Company's business model to a sole asset management company. As a result of this transaction, Centerline was required to take a $95 million charge on the sale to Freddie Mac to reflect the current value of the portfolio. In addition, Centerline was also required to assume a $140 million contingent obligation on the sale of the debt portfolio to Freddie Mac. Lastly, Defendants said that Centerline would be cutting its annual dividend 65%, from $1.68 per share to only $0.60 per share. As a result of the news, Centerline stock fell from $10.27 per share on December 27, 2007 to $7.70 per share on December 28, 2007, representing a 25% one-day decline, on unusually high trading volume of more than 4.1 million shares.
