PHILADELPHIA, Oct. 07, 2024 (GLOBE NEWSWIRE) -- Berger Montague PC informs investors that the firm has filed a securities class action in the United States District Court for the District of New Jersey against Cross River Bank (“CRB”), Bank Partner to Sunlight Financial Holdings, Inc. f/k/a Spartan Acquisition Corp. II (“Sunlight”) (NYSE: SUNL; OTC: SUNLQ; NYSE: SPRQ). The action is captioned Wax v. Cross River Bank, Case No. 2:24-cv-09510 and is brought on behalf of investors who purchased Sunlight securities between January 25, 2021 and October 31, 2023, inclusive (the “Class Period”).
Investor Deadline: Investors who purchased or acquired Sunlight securities during the Class Period may, no later than December 2, 2024 seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation, please contact Berger Montague: Andrew Abramowitz at aabramowitz@bm.net or (215) 875-3015, Peter Hamner at phamner@bm.net or (215) 875-3048, or visit: https://investigations.bergermontague.com/sunlight-financial/
According to the complaint, during the Class Period, CRB engaged in a scheme to extend loans to disreputable solar contractors of dubious credit quality and facilitate Sunlight’s accumulation of a large loan pools of fixed-rate loans on CRB’s balance sheet for which Sunlight retained the risk of loss. These loans contained enormous levels of risk of default and interest rate risk for Sunlight, but Sunlight lacked the necessary capital to tolerate a default or significant rise in interest rates.
Neither Sunlight nor CRB disclosed to Plaintiff and the Class the magnitude of that risk or, when interest rates increased, the extent of Sunlight’s mounting off-balance sheet liabilities (which were being warehoused on the balance sheet of Sunlight’s Bank Partner, CRB).
CRB’s repeated extensions of credit and agreement to help Sunlight conceal its true indebtedness from investors by having it recorded in CRB’s books, coupled with Sunlight’s false statements about its true loan exposure, kept Sunlight’s true financial distress a secret from investors, which kept the price of Sunlight’s shares artificially inflated during the Class Period.
A series of disclosures beginning on September 28, 2022 revealed the true state of Sunlight’s financial picture. For instance, on that date, Sunlight announced that it was taking a non-cash advance receivable impairment of $30 to $33 million stemming from liquidity issues by one installer. Sunlight’s stock price plummeted 57%, or $1.44 per share, on the news, falling from a closing price of $2.52 per share on September 28, 2022 to a close of $1.08 per share on September 29, 2022.
The truth continued to be incrementally revealed to investors until October 31, 2023, when investors fully learned of CRB’s fraudulent scheme. On that date, Sunlight announced it had filed for Chapter 11 bankruptcy with a pre-packaged plan whereby CRB would provide exit financing in return for 12.5% of the New Equity in the reorganized company. Under the plan, the interests of Plaintiff and the other common stockholders of Sunlight were extinguished. On this news, shares of Sunlight fell $0.13 per share, or 34%, from a closing price of $0.38 per share on October 30, 2023 to a close of $0.25 per share on October 31, 2023.
A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. The lead plaintiff is usually the investor or small group of investors who have the largest financial interest and who are also adequate and typical of the proposed class of investors. The lead plaintiff selects counsel to represent the lead plaintiff and the class and these attorneys, if approved by the court, are lead or class counsel. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the Court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Berger Montague, with offices in Philadelphia, Minneapolis, Washington, D.C., San Diego, San Francisco and Chicago, has been a pioneer in securities class action litigation since its founding in 1970. Berger Montague has represented individual and institutional investors for over five decades and serves as lead counsel in courts throughout the United States.
Contacts:
Andrew Abramowitz, Senior Counsel
Berger Montague
(215) 875-3015
aabramowitz@bm.net
Peter Hamner
Berger Montague PC
(215) 875-3048
phamner@bm.net
