BankAtlantic Bancorp Inc. in Fort Lauderdale, Fla., said in its annual report that mounting legal problems could have an adverse effect on its financial results.
The $4.5 billion-asset company said in a Thursday filing with the Securities and Exchange Commission that it was denied coverage in a class-action securities litigation by its provider of director and liability insurance.
In November 2010, a jury in the U.S. District Court for the Southern District of Florida ruled that BankAtlantic violated securities laws by misstating credit quality in 2007. The court awarded damages of $2.41 a share to the case's plaintiffs.
BankAtlantic's insurer denied the claim because the jury found intentional wrongful acts by the executives, the filing said. The company and the unnamed insurer have agreed to postpone any legal action until Sept. 1, as BankAtlantic appeals the jury's decision.
The company said that in January the Office of Thrift Supervision advised its thrift unit that it had engaged in deceptive and unfair practices related to its deposit products. BankAtlantic submitted a written response to the OTS in early February. The company has also been the subject of an SEC investigation since October 2008.