PHILADELPHIA -- A federal appeals court has reinstated part of a shareholder lawsuit against officers and directors of UJB Financial Corp. that claims the New Jersey bank holding company fraudulently misrepresented its loan-loss reserves.
A district court judge had dismissed the case, agreeing with UJB's lawyers that the deterioration in reserves caused by the 1990 real estate downturn was impossible to predict or resulted from mismanagement, not fraud.
The appeals court reinstated a portion of the case, stating that the plaintiffs should have a chance to prove their contention that UJB's statements before 1990 fraudulently misrepresented actual stated reserves.
