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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
December 21, 2000
Commission File No. 33-69326
CNB HOLDINGS, INC.
(Exact name of the registrant as specified in its charter)
Virginia 54-1663340
(State of Incorporation) (I.R.S. Employer Identification No.)
P.O. Box 1060, 900 Memorial Drive, Pulaski, Virginia 24301
(Address of principal executive offices)
(540) 994-0831
(Issuer's telephone number, including area code)
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(Former name, former address, and former fiscal year,
if changed since last report)
Item 5. Other Events
Community National Bank ("CNB"), the wholly-owned banking subsidiary of CNB
Holdings, Inc., is the defendant in a suit filed on November 22, 2000 by a West
Virginia bank in the United States District Court for the Western District of
Virginia, Roanoke Division. The suit seeks to recover damages in the total
amount of $3,411,875.06 arising from an apparent check-kiting scheme engaged in
by a customer of both banks. The
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amount claimed includes the amount represented by checks deposited by the
plaintiff and returned unpaid by CNB, and $1,000,000.00 in alleged consequential
damages.
CNB has filed a responsive pleading denying any liability to the plaintiff. CNB
also expects to file a third party complaint seeking judgment against the
correspondent bank which handled the notice of return, in the event the
plaintiff is able to establish that CNB is liable to it for certain of the
returned checks. The case is in the preliminary stages, and no discovery has yet
been taken by either party.
CNB intends to contest this suit vigorously, and believes that it has
substantial defenses to liability, an opportunity to develop evidence which may
limit the amount of recoverable damages awarded, if any, and a potential claim
for indemnity from its correspondent bank for damages relating to certain of the
returned checks.
CNB Holdings entered into an agreement and plan of merger with FNB Corporation
on July 10, 2000 which contains customary conditions, including a requirement
that no material adverse change in the financial condition or business of CNB
Holdings shall have occurred since December 31, 1999. In view of the amount of
damages claimed and the inherent uncertainty of litigation, submission of the
pending merger to the stockholders of CNB Holdings has been delayed and could
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be adversely affected.
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
CNB HOLDINGS, INC.
Date: December 21, 2000 By: /s/ Phillip M. Baker
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Phillip M. Baker
Chief Financial Officer
