PHILADELPHIA, May 13, 2005 (PRIMEZONE) -- Law Offices Bernard M. Gross, P.C. (http://www.bernardmgross.com) announces that a class action lawsuit, numbered 05-289, was commenced in the United States District Court for the District of Delaware, against defendants MBNA Corp., Bruce L. Hammonds, Kenneth A. Vecchione, Richard K. Struthers, Charles C. Krulak, John R. Cochran, III, Michael G. Rhodes, Lance L. Weaver, and John W. Scheflen on behalf of all persons who purchased MBNA securities (NYSE:KRB), between January 20, 2005 and April 21, 2005.
The complaint charges MBNA, Bruce L. Hammonds, Kenneth A. Vecchione, Richard K. Struthers, Charles C. Krulak, John R. Cochran, III, Michael G. Rhodes, Lance L. Weaver and John W. Scheflen with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company grossly underestimated the cost of the restructuring charge associated with the Company's previously announced plan to reduce overhead by offering early retirement to its workers; (2) that the Company was experiencing a high level of customer delinquencies; (3) that the Company's customers were paying down their credit card bills, particularly on high- interest-rate cards, reducing the dollar value of managed loans in MBNA's portfolios; (4) that due to faster customer pay downs MBNA was forced to reevaluate its interest-only("IO") strips resulting in a $206 million loss in securitization activity; and (5) that the Company's projected earnings growth of 10 percent in fiscal 2005 lacked in all reasonable basis when made. While defendants were aware of the adverse information and the market was not, defendants were able to sell over 2.8 million shares for proceeds of $75.9 million.
On April 21, 2005, MBNA announced net income for the first quarter of 2005. The Company's results were significantly impacted by the restructuring charge and unexpectedly high-payment volumes from U.S. credit card customers. News of this shocked the market. Shares of MBNA fell $3.83 per share or 16.57 percent, on April 21, 2005, to close at $19.28 per share.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Deborah R. Gross or Susan R. Gross of Law Offices Bernard M. Gross at 866-561-3600(toll-free) or via e-mail at susang@bernardmgross.com. If you are a member of this class, you can view a copy of the complaint as filed at http://www.bernardmgross.com. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
If you purchased or otherwise acquired the securities of MBNA Corporation between January 20, 2005 and April 21, 2005, and sustained damages, you may, no later than July 5, 2005 to file a motion to be appointed lead plaintiff, if you so choose. Law Offices Bernard M. Gross, P.C. has significant experience and expertise in prosecuting class actions.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.