Business & Tech

PD: Shareholders' Lawsuit Blames Bank CEO for Collapse

Imprudent loans blamed for the $71 million drop in share value.

A class action lawsuit of the Sonoma Valley Bank, blames former bank president and chief executive officer Sean Cutting for the banks demise, reports the Santa Rosa Press Democrat.

The lawsuit blames a series of more than $40 million of loans made to companies and , a Marin County developer, on the bank's demise. Only $5 million of these loans were repaid.

In the three years between the fall 2007 and the summer of 2010, Sonoma Valley Bank stock dropped from $31 a share to less than one cent - eliminating about $71 million of stock value.

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Filed in Sonoma County Superior Court, the suit will cover anyone who owned shares as of Aug. 25, 2010.

Read the full text of the update here.

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