Case: Capitala Finance Corp.
Venue: Central District of California
Class Period: 1/4/2016 - 8/7/2017
Lead Plaintiff Deadline: 2/26/2018
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NEW YORK, NY – January 9, 2017 – Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating claims on behalf of investors of Capitala Finance Corp. (“Capitala ” or the “Company”) (NASDAQ: CPTA).  Investors who purchased Capitala shares may be affected.

A class action complaint has been filed in the United States District Court for the Central District of California against Capitala, its Chairman and CEO, and its CFO on behalf of persons or entities that acquired the publicly traded securities of Capitala between January 4, 2016 and August 7, 2017, inclusive (the “Class”) alleging violations of the Securities Exchange Act of 1934.

Capitala is a business development company that invests primarily in first and second liens, subordinated debt and, to a lesser extent, equity securities issued by lower and traditional middle-market companies.

On January 4, 2016, Capitala announced that its investment adviser, Capitala Investment Advisors, LLC, had voluntarily agreed to waive its quarterly incentive fee.

On August 7, 2017, Capitala disclosed in an aftermarket press release that six of its investments were on non-accrual status - twice as many as in the previous quarter.

On August 8, 2017, Capitala’s Chief Executive Officer, Joseph B. Alala III, revealed during a Company conference call that the Company had been losing professional talent, including underwriting and portfolio management professionals, due to the waiving of the incentive fee and that this had led to a rising number of nonaccrual investments.  Following this news, Capitala’s shares fell $3.82 per share, or approximately 30%, over the next three trading days to close at $8.99 per share on August 10, 2017.

The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements about the Company’s business, operations, and prospects.  Specifically, Defendants made false and/or misleading statements and/or failed to disclose that (1) Capitala Investment Advisors had been losing professional talent in both underwriting and portfolio management due to the waiving of its incentive fee, (2) such loss of talent negatively impacted the quality of the Company’s investment portfolio, and (3) as a result, Capitala’s public statements were materially false and misleading at all relevant times.

If you are a member of the proposed Class, you may move the court no later than February 26, 2018 to serve as a lead plaintiff for the purported class.  You need not seek to become a lead plaintiff in order to share in any possible recovery.  If you would like to discuss the complaint or our investigation, please contact us by emailing This e-mail address is being protected from spambots. You need JavaScript enabled to view it or by calling 800-290-1952.This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Kaplan Fox & Kilsheimer LLP, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com.  If you have any questions about this Notice, the action, your rights, or your interests, please contact: 

Donald R. Hall
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
(800) 290-1952
(212) 687-1980
Fax: (212) 687-7714
E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
350 Sansome Street, Suite 400 
San Francisco, California  94104
(415) 772-4700
Fax:  (415) 772-4707
E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it