NEW YORK, Jan. 6, 2010 (GLOBE NEWSWIRE) -- Pomerantz Haudek Grossman & Gross LLP (www.pomerantzlaw.com) ("Pomerantz") has filed a class action lawsuit in the United States District Court, Southern District of New York, against Kohlberg Capital Corporation ("Kohlberg" or the "Company") (Nasdaq:KCAP) and certain of its top officers and directors. The class action (10-cv-0080) was filed on behalf of purchasers of the securities of the Company between March 16, 2009 and December 24, 2009 inclusive, (the "Class Period"). The Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder.
Kohlberg is an investment company which originates, structures, finances and manages a portfolio of term loans, mezzanine investments and selected equity securities in middle market companies. The Complaint alleges that throughout the Class Period, Defendants misrepresented Kohlberg's financial results and operating conditions. Specifically, the Company reported inflated earnings that violated Generally Accepted Accounting Principles ("GAAP") by failing to properly account for the fair value of its investment portfolio under FASB Statement of Financial of Financial Accounting Standards No. 157 - Fair Value Measurements ("SFAS No. 157").
On November 9, 2009, Kohlberg announced its auditor, Deloitte & Touche LLP ("Deloitte"), raised questions concerning the Company's methodology and process in valuing its loan portfolio under GAAP. As a result of these questions, the Company stated it would not be able to timely file with the SEC its third quarter results for the period ended September 30, 2009. As a result, the Company's stock price fell $0.56 per share, or more than 10%, to close at $4.96.
On December 15, 2009 Kohlberg announced that its financial statements for the fiscal year ended December 31, 2008 and the first two quarters of 2009 should no longer be relied upon, due to issues regarding valuation of the Company's loan portfolio.
On December 24, 2009, Kohlberg filed with the SEC a letter it received from Deloitte, in which Deloitte disagreed with many of Kohlberg's contentions in its recent disclosures. Deloitte stated, among other things, (a) that management essentially ceased providing substantive information about the Company's valuation of its loan portfolio to Deloitte on December 14, 2009; (b) that significant unanswered and unfulfilled information requests remain outstanding; (c) that Kohlberg had previously provided Deloitte a revised valuation of the Company's loan portfolio as of December 31, 2008, which reflected a material reduction in the fair value of the Company's loan portfolio investments as of that date, but that those revisions had not been shown to certain Kohlberg board members as of December 15, 2009; and (d) that Deloitte now believes the information supporting the fair values reflected in the Company's previously issued 2008 and interim financial statements was and continues to be incomplete and inaccurate.
On this news, the next two trading days, shares of Kohlberg declined $0.44 per share or 8.5% per share, to close at $4.72 on December 29, 2009.
If you are a shareholder who purchased the securities of Kohlberg during the Class Period, you have until March 1, 2010 to ask the Court to appoint you as lead plaintiff for the class. Shareholders outside the United States may join the action, regardless of where they live or which exchange was used to purchase the securities. A copy of the complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Teresa L. Webb at (tlwebb@pomlaw.com) or 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz Firm, with offices in New York, Chicago, Washington, D.C., Columbus, Ohio and Burlingame, California, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. More than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.