BALA CYNWYD, PA / ACCESSWIRE / January 12, 2018 / On behalf of the law office of Brodsky & Smith, LLC, notice is hereby given that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of those who purchased or otherwise acquired Triangle Capital Corporation ("Triangle") (TCAP) securities between May 7, 2014 and November 1, 2017, both dates inclusive (the "Class Period"). The class action seeks to recover damages against Defendants for alleged violations of federal securities laws.
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Triangle is a specialty finance Company that provides customized financing to lower middle market companies located primarily in the United States.
According to the lawsuit, on November 1, 2017, Triangle announced its financial results for the quarter ended September 30, 2017, revealing that the fair value of the Company's investment portfolio had declined nearly 7% from the prior quarter and that it had suffered $8.9 million in net realized losses and $65.8 million in net unrealized depreciation to its portfolio during the quarter. The Company also disclosed that it had moved seven investments to full non-accrual status during the quarter and that the amount of investments on non-accrual had ballooned to 13.4% and 4.7% of the Company's total portfolio at cost and at fair value, respectively.
On this news, Triangle's share price fell $2.57, or approximately 21%, to close at $9.68 on November 2, 2017.
The lawsuit alleges that, throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (i) that, as early as 2013, Triangle's investment professionals had internally recommended moving away from mezzanine loan deals due to changes in the market that no longer made these investments attractive risk-reward opportunities; (ii) that the Company's former CEO, defendant Garland S. Tucker, III, had ignored the advice of Triangle's investment professionals to chase higher short-term yields by causing Triangle to invest in mezzanine debt despite the poor quality of the loans and their increased risk of defaults and non-accruals; (iii) that the Company's entire vintage of 2014 and 2015 investments were at substantial risk of non-accrual as a result of the poor quality of the investments and deficient underwriting practices in place at the time of the investments; (iv) that more than 13% of Triangle's investment portfolio at cost was at risk of non-accrual and, thus, the fair value of the Company's asset portfolio was artificially inflated; (v) that Triangle had materially understated the number of loans performing below expectations and/or in non-accrual and had delayed writing down impaired investments; (vi) that Triangle failed to implement effective underwriting policies and practices to ensure it received appropriate risk-adjusted returns on its investments; and (vii) that, as a result of the above, Triangle's business, prospects and ability to maintain its dividend level of $0.45 were materially impaired.