News

Court Grants Final Approval to Six-Million Dollar Shareholder Derivative Settlement

On May 1, 2008, Judge Gordon J. Quist of the United States District Court for the Western District of Michigan granted final approval to a $6 million settlement in Virginia M. Damon Trust v. Mackinac Financial Corp. (f/k/a North Country Financial Corp.), nominal defendant, and Ronald G. Ford, defendant, Case No. 03 CV 135.

This shareholder derivative lawsuit was filed in 2003, with WW acting as co-lead counsel with Lee Squitieri of Squitieri & Fearon, LLP. The complaint alleged that North Country Financial Corporation’s (n/k/a Mackinac Financial Corp.) former CEO breached his fiduciary duties to the bank and its shareholders by mismanaging the bank’s commercial loan portfolio, failing to heed repeated warnings from regulators regarding internal controls at the bank, and failing to correct specific deficiencies in the bank's underwriting, loan collection, and loan administration functions, among other things.

After years of aggressive litigation, including significant motion practice, extensive analysis by banking and economic experts, and arms'-length negotiations, the parties reached this settlement. It dwarfs a settlement in a related securities action and provides the bank and its shareholders with a significant recovery ---- it delivered approximately $1.04 to the bank’s earnings per share which were $2.96 for all of 2007, and only $0.50 for all of 2006.