A securities class action was recently filed to represent investors in Seadrill Limited equities.
Seadrill, incorporated in Bermuda and run from London, is a major offshore deepwater drilling firm. According to the the corporate website, the company's fleet contains 69 rigs including semi-submersibles, drillships, jack-up and tender rigs. As a result of having these resources, Seadrill is capable of drilling in environments that range from ultradeep to shallow, from challenging to benign.
Robbins Geller securities class action
On Dec. 5, 2014, Robbins Geller Rudman & Dowd LLP announced that it had filed a securities class action to represent all individuals and organizations that bought American Depository Receipts between July 10, 2014, and Nov. 25, 2014. These dates represent the class period.
The lawsuit, which claims that the company and certain senior executives breached the Securities Exchange Act of 1934, was brought forth in the United States District Court for the Southern District of New York.
The Rosen Law Firm suit
The Rosen Law Firm also announced on Dec. 5, 2014, that it had brought forth a shareholder class action to represent the company's shareholders. This lawsuit was filed on the behalf of those people and organizations that bought the major offshore deepwater drilling firm's limited stock.
Securities class action allegations
The legal action brought forth by The Rosen Law Firm made allegations involving the company's statements surrounding its dividend payments. The lawsuit claimed that Seadrill falsely stated it would maintain this regular payment until at least the end of 2015, and when it was terminated earlier than that, markets responded by pushing the organization's shares lower.
The Robbins Geller suit made similar claims, specifically that the company made statements about its prospects and business – that were materially false and misleading – during the class period. As a result of these statements, the company's ADRs allegedly traded at artificially inflated prices.
Historically, Seadrill has provided its shareholders with a healthy dividend. This regular payment was hiked twice in early 2014, which resulted in the major offshore drilling firm paying a quarterly dividend of $1 per share during the year's last two quarters. During the class period, the defendants stated that the company would not reduce its annual dividend of $4. They represented that regardless of the oil industry's volatility, the organization boasted a strong balance sheet and backlog.
Jonathan Horne, attorney for The Rosen Law Firm, provided additional detail in the suit his firm filed.
"The lawsuit alleges that Seadrill falsely told investors in July 2014 that it would maintain its dividend until at least the end of 2015. The statements stabilized its stock price and allowed it to retire several hundred million dollars of its debt," he said in a statement released for the securities class action.
Company releases financial results
Before the markets opened on Nov. 26, 2014, Seadrill announced that during the three-month period ending Sept. 30, 2014, it had failed to hit its profit targets. In addition, the major offshore drilling firm revealed that its board of directors had approved a repurchase program wherebuy it could buy back as much as 10 percent of all outstanding shares. Finally, the company revealed that it was halting its dividend indefinitely, citing the need to pay down debt and improve its balance sheet.
Markets responded to the aforementioned by pushing the ADRs to $15.99 each from the prior price of $20.71. The new value was 58 percent below the high these securities reached during the class period.
As a result of this news, Seadrill lost more than $2 billion in market capitalization in one day, Horne claimed.
What investors can do
Robbins Geller indicated that by filing the lawsuit, it is seeking to recover damages on the behalf of investors. The law firm specified that those interested in serving as lead plaintiff have no later than 60 days following the filing of the legal claim to move the court.
The Rosen Law Firm also provided information for eligible investors, but stated that no class has yet been certified for the lawsuit it brought forth. As a result, individuals and organizations represented in the legal claim can choose their counsel. However, they must keep in mind that since no class has been certified yet, they are not represented by counsel unless they retain such services.
In addition, the law firm stated that eligible investors have the option to be absent class members and take no action at this point. However, those that are interested in serving as lead plaintiff have until Feb. 3, 2015, to move the court.
Further, investors who wish to have a conversation about their rights in the lawsuit brought forth by The Rosen Law Firm, or their interests in the matter, can contact Jonathan Horne, Esquire, or Phillip Kim, Esquire. In addition, those who wish to join the purported securities class action can go to the law firm's website.