Monday, July 21, 2008

BankAtlantic Sues Richard X. Bove and Ladenburg Thalmann for Defamation

Richard Bove of Ladenburg Thalman and Ladenburg are being sued by BankAtlantic for appearing on Richard Bove's list of troubled banks.

BankAtlantic claims it should not be on the list. Although we published a list of some of the names Bove listed, we did not list BankAtlantic. On occasion analysts will run screens off of macro data, which can be deceiving as to the true picture of a company, since macro data does not provide the details behind a number, and sometimes the details will provide an explanation for certain data that will change the picture of the company under review. This appears to be the case with BankAtlantic.

In BankAtlantic's case, the bank claims:

The problem is that, while Bove's report purports to consider which banks might fail, he failed to examine the health of the banks and thrifts in his report. Instead, he only examined holding company data which, in at least our case, is meaningless information. This is simply shocking. .. BankAtlantic's two holding companies, BankAtlantic Bancorp and BFC Financial Corporation contain other assets and business lines which make the comparison nonsensical. Simply by way of example of the gross errors in this "analysis," Bove compared the non-performing loans of BankAtlantic with the capital of BFC Financial Corporation, a public company that owns 23% of BankAtlantic Bancorp that in turn owns BankAtlantic and other business lines. The so-called analysis itself was totally false and the impression it created foreseeable.

Bove's methodology of how to look for troubled companies is correct and would hold for most banks, if, however, the bank holding companies holds other assets, the data could be thrown off dramatically. If you pump the wrong numbers in, you are going to get the wrong numbers out. That appears to be the BankAtlantic situation

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