Securities class action filed against CHC Group Ltd.

A securities class action was recently filed against CHC Group Ltd.

CHC, based in Richmond, British Columbia, provides the global offshore oil and gas industry with commercial helicopter services. The company offers offshore transportation, as well as repair, maintenance, overhaul and support services. In addition, the firm conducts emergency medical missions.

A securities class action was recently filed against CHC Group Ltd. A securities class action was recently filed against CHC Group Ltd.

Shareholder lawsuits
On May 18, 2015, a law firm announced the filing of a shareholder class action lawsuit that represented all investors who came to own the company’s common stock in connection to the initial public offering held between Jan. 16, 2014, and July 10, 2014.

This securities class action, which alleged that there were multiple breaches of the 1933 Securities Act in relation to CHC’s IPO, was brought forth in the U.S. District Court for the Southern District of New York. The legal claim named not only CHC, but also the investment banks who helped underwrite its primary offering, as defendants. In addition, the suit named certain company officers.

On May 21, 2015, a second law firm announced the filing of a separate lawsuit on the behalf of CHC shareholders who purchased the company’s common stock between Jan. 17, 2014, and July 10, 2014, including those who acquired the offshore transportation provider’s securities in relation to its IPO commenced on or around Jan. 16, 2014.

This legal claim was brought forth in the U.S. District Court for the Southern District of New York, and claimed that the company, as well as certain officers, breached the Securities Act of 1933.

Specific allegations
The first lawsuit claimed that during the class period, defendants neglected to reveal key facts – and also made materially false and misleading statements – relating to the business, prospects and operations of CHC.

“Markets responded by pushing shares lower, causing them to reach a closing value of $7.63 on July 10, 2014.”

More specifically, the securities class action alleged that the public statements and filings – including the registration statement that went along with the company’s Jan. 16, 2014 offering – did not reveal that Petroleo Brasiliero S.A. had stopped making payments to the company for its existing contracts.

Disclosure
On July 10, 2014, CHC chief financial officer Joan Hooper disclosed to the public that the Petroleo Brasiliero had not provided CHC with any payments since April 2013, which was almost 10 months before the offshore transportation firm held an IPO, according to the second claim.

In addition, Hooper revealed that CHC did not anticipate recovering these particular revenues, and that because the contracts with this major customer had been suspended, CHC’s revenues and EBITDAR would come in near the bottom of the offshore transportation firm’s guidance ranges for fiscal year 2014. Finally, the offshore transportation firm revealed that the guidance for future quarters would not reflect any recovery.

Markets responded by pushing shares lower, causing them to reach a closing value of $7.63 on July 10, 2014, 11 percent lower than the closing from of $8.62 the day before. For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or info@battea.com.