Fauquier Bankshares sued over filing misleading information on pending merger

Warrenton, Va.-based Fauquier Bankshares Inc. and its board of directors were sued over allegedly filing incomplete and misleading information related to the bank's pending merger of equals with Charlottesville, Va.-based Virginia National Bankshares Corp.

The plaintiff, Fauquier shareholder Pinchas Raul, argues Fauquier's board authorized the filing of a materially incomplete and misleading proxy statement with the Securities and Exchange Commission in order to convince the company's shareholders to vote in favor of the proposed transaction.

In particular, the lawsuit states the filing fails to provide material information on Piper Sandler & Co.'s and Performance Trust Capital Partners' financial analyses and opinions on the proposed merger. Furthermore, it fails to provide the approximate full amount of compensation that Performance Trust stands to receive for its advising, according to the lawsuit.

The plaintiff also alleges the filed statement lacks material information concerning the sales process, including illustrative transaction terms, reviewed financial projections and any confidentiality agreements entered into by Fauquier that contained "don't-ask, don't waive" or standstill provisions.

The lawsuit seeks to enjoin Fauquier from taking any steps to complete the transaction unless and until the material information is disclosed to Fauquier shareholders before the vote on the pending merger. In the event that the proposed transaction is consummated, the plaintiff is seeking to recover damages stemming from the defendants' violations of the Exchange Act, according to the lawsuit.