Synovus Financial Corp. investors, led by two pension funds, reached an $11.8 million settlement of a lawsuit against the bank over more than $200 million in soured loans to the Georgia luxury resort Sea Island Co., according to a court filing.
The shareholders of Synovus sued in 2009 after the real estate market collapsed and tourism declined, hurting the business of the 85-year-old resort, which filed for bankruptcy protection in 2010.
The investors accused Columbus, Georgia-based Synovus and its current and former directors and executives of gross mismanagement in their handling of the loans and of making false and misleading statements to investors.
The Labourers' Pension Fund of Central and Eastern Canada and the Sheet Metal Workers' National Pension Fund filed a request yesterday in federal court in Atlanta seeking approval of the accord, reached on behalf of investors who bought Synovus stock from Oct. 26, 2007, to April 22, 2009.
"The settlement of this litigation on the terms and conditions set forth in the settlement stipulation is an excellent result for the class and is fair, reasonable and adequate," lawyers for the pension funds said in their request.
The case is City of Pompano Beach General Employees' Retirement System v. Synovus Financial Corp. (SNV), 09-cv-01811, U.S. District Court, Northern District of Georgia (Atlanta.)