Centerline Holding Company may have misrepresented to investors its financial condition and business plan.

This is a securities class action lawsuit against Centerline Holding Company (Centerline) and certain of its officers and directors

The securities class action lawsuit alleges that Centerline issued a series of materially false and misleading statements about Centerline's business model and financial condition, including statements concerning its portfolio of tax-exempt first mortgage bonds, which generated the majority of Centerline's revenues and supported Centerline's $1.68 per share annual dividend.

Centerline's statements concealed from the investing public that Centerline was in the midst of structuring a sale of the Centerline's mortgage revenue bond portfolio to a third party. On December 28, 2007, Centerline shocked the financial markets with a press release announcing that Centerline had sold its $2.8 billion tax-exempt affordable housing bond portfolio to a third party and, in the process, transformed Centerline's business model to a pure asset management firm.

As a result of this transaction, Centerline disclosed that it would be slashing its annual dividend from $1.68 per share to only $0.60 per share. Even more shocking was the revelation that Defendants had entered into a related party transaction with a company owned by certain of the Defendants called The Related Companies, L.P. ("TRCLP"), whereby TRCLP agreed to provide Centerline $131 million in financing, in exchange for 12.2 million shares of newly-issued convertible preferred stock that will pay Centerline insiders an 11% dividend.

In reaction to this news, the price of Centerline stock plummeted from $10.27 per share on December 27, 2007, to close at $7.70 per share on December 28, 2007, representing a 25% single-day decline, on unusually heavy trading volume of 4,152,688 shares.