NEW YORK - (NewMediaWire) - August 07, 2020 - Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in McDermott International, Inc. ("McDermott" or the "Company")(OTC:MDRIQ) of the September 16, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against executives of the Company.
If you invested in McDermott stock or options between September 20, 2019 and January 23, 2020 and would like to discuss your legal rights, click here: www.faruqilaw.com/MDRIQ. There is no cost or obligation to you.
You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to firstname.lastname@example.org.
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The lawsuit has been filed in the U.S. District Court for the Southern District of Texas on behalf of all those who purchased McDermott common stock between September 20, 2019 and January 23, 2020 (the "Class Period"). The case, Ahnefeldt et al. v. Dickson et al., No. 20-cv-02539 was filed on July 17, 2020, and has been assigned to Judge George C. Hanks, Jr.
The lawsuit focuses on whether the Company’s executives violated federal securities laws by failing to disclose that Defendants knowingly and/or recklessly made, and caused McDermott to make, materially false and misleading statements, and/or omit material facts regarding the sale of certain assets of McDermott. These statements were made with the intent to conceal the acute liquidity crisis McDermott actually faced, provide the Company time to prepare a prepackaged plan of reorganization with its secured lenders and other stakeholders, and avoid a freefall Chapter 11 filing.
Specifically, on September 20, 2019, McDermott announced in a press release its recent receipt of unsolicited approaches to acquire Lummus Technology, McDermott’s industry leading technology business with a valuation exceeding $2.5 billion. McDermott told investors that it was "exploring strategic alternatives to unlock the value of Lummus Technology," that the "process of exploring strategic alternatives is part of our ongoing efforts intended to improve McDermott’s capital structure," and "we plan to use the proceeds from any transaction involving Lummus Technology to strengthen our balance sheet." These disclosures received widespread attention and the price for McDermott common stock increased.
Then, on January 21, 2020, the truth emerged when McDermott announced its entry of a Restructuring Support Agreement in connection with a Joint Prepackaged Chapter 11 Plan of Reorganization. In the plan documents, it was revealed that there was not any plan for a near-term sale of Lummus Technology to strengthen McDermott’s balance sheet. The disclosures were made as part of a scheme to artificially inflate the market price of McDermott’s common stock, calm the market and allow the Company to negotiate a prepackaged Chapter 11 bankruptcy restructuring plan.
On this news, McDermott’s share price fell from $0.70 per share on January 17, 2020 to a closing price of $0.12 on January 23, 2020: a $0.58 or an 82.81% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding McDermott's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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