quality data (which included the list of loans requiring special attention as of September 30), interim monthly financial statements, minutes of the executive committee meetings, loan committee reports, and analyses of the provision for loan loss and nonperforming loans. The Geothermal loan, which was the subject of the September 11, 1989 letter from Alan Fine to Bogan, was discussed at the October 20, 1989 meeting. The Call Report filed with the Federal Reserve Board for the period ending June 30, 1989 was presented at that meeting wherein entries representing nonperforming loans of $ 31 million were indicated.
At the November 17, 1989 Special Boulevard Board of Directors Meeting, which Bogan also attended, the Boulevard Consolidated Monthly Financial Report for October of 1989 was distributed. That report showed nonperforming loans of $ 28 million.
At the Boulevard Board of Directors meeting on December 15, 1989 which Bogan also attended, it was announced that Boulevard had filed its Call Report for the period ending September 30, 1989 with the Federal Reserve Bank of Chicago. Schedule HC-H of the Call Report showed nonperforming loans totaling $ 40 million. Boulevard's Monthly Financial Report for November of 1989 was also distributed. This report showed that Boulevard's nonperforming loans were then totaling $ 45.4 million, and that Boulevard's reserve for loan losses was just under $ 14 million. Also at the December 15, 1989 board meeting, it was reported that Boulevard proposed a sale of the $ 14 million Geothermal loan at a loss of $ 3.3 million and a resulting decrease of approximately $ 2 million in net income.
Defendants correctly argue that the above-summarized reports and/or information remained readily available for plaintiffs' review and inspection after the closing as shareholders of Boulevard and as directors of National Security. In response to this assertion, plaintiffs merely say that defendants made no offer to permit any review other than that which was undertaken by Peat Marwick in March of 1989. This argument falls way short of stating a concealment or omission which is actionable under the federal securities laws. Nowhere do plaintiffs assert that they ever requested from Boulevard and were denied access to any information or files.
In sum, plaintiffs do not genuinely dispute any of the facts which defendants assert in support of their motion for summary judgment. The court is thus left to determine the legal significance of those facts, i.e., whether plaintiffs knew, or by the exercise of reasonable diligence could have discovered that of which they now complain prior to December 29, 1989.
Peat Marwick reviewed Boulevard's loan portfolio on plaintiffs' behalf and reported certain facts to plaintiffs. Plaintiffs had complete access to Boulevard's internal financial data before the September 29, 1989 closing (and certainly -- as a director of Boulevard (Bogan), as shareholders of Boulevard, and as directors of National Security -- in the three months after the closing and before December 29, 1989). Numerous public disclosures relating to Boulevard's loan portfolio were also available before the closing. Bogan personally discussed the status of the Geothermal loan on at least several occasions with defendants before the closing. Plaintiffs also had access to public and internal information regarding the status of Boulevard's loan portfolio after the closing but before December 29, 1989. Bogan sat on Boulevard's Board of Directors for almost three months prior to December 29, 1989. He was given all information that was given to all the other directors and had access to any other information he requested.
The plaintiffs are very sophisticated business and/or legal people who are well equipped to function in the world of banking and finance. There are no country bumpkins among them. At the very minimum, this action should be time-barred because they had information which should have excited their suspicion long before December 29, 1989. There were sufficient signs of contradiction between what plaintiffs now say Boulevard communicated or failed to communicate to plaintiffs regarding various aspects of its loan portfolio, and what the public record actually reported to put plaintiffs on notice that defendants committed the SA and SEA violations of which plaintiffs now complain.
Based upon the undisputed admissions and affidavits on file, a rational trier of fact can come to only one conclusion: plaintiffs knew, or through the exercise of reasonable diligence could have known, of the existence of the "misrepresentations and omissions" alleged in their complaint prior to December 29, 1989. Accordingly, defendants' motion for summary judgment is granted as to plaintiffs' federal claims (counts one through four) because they are time-barred. Plaintiffs' pendent state law claims (counts five through eight) are dismissed for lack of subject matter jurisdiction. The preliminary injunction issued on May 3, 1991 is hereby dissolved. Thus, defendants' motion to reconsider this court's granting of plaintiffs' motion for a preliminary injunction is moot.