Kohut v. KBR, Inc. et al.
|Court:||United States District Court, Southern District of Texas|
|Class Period:||04/25/2013 - 05/ 5/2014|
|Case Contacts:||John Rizio-Hamilton, Jonathan D. Uslaner|
Securities fraud class action filed on behalf of a class of persons and entities who purchased or acquired the securities of KBR, INC. (“KBR” or the “Company”) between April 25, 2013 and May 5, 2014, inclusive (the "Class Period").
KBR is a global engineering, construction and services company based in Houston, Texas. On May 5, 2014, the company announced that it filed a Form 8-K with the SEC declaring that the Company’s financial statements filed with the SEC on Form 10-K for the fiscal year ended December 31, 2013 should no longer be relied upon. According to KBR, this was due to material financial statement errors primarily attributable to how the Company estimated costs to complete seven of its contracts, which resulted in massive pre-tax charges and a reversal of $20 million in previously recognized profits. In light of this disclosure, investors suffered significant losses during an unusually heavy volume of share sell-offs that caused a precipitous decline in share value.
Accordingly, on July 8, 2014, Plaintiff filed an Amended Class Action Complaint alleging that KBR misled investors by making false and/or misleading statements, as well as failing to disclose material adverse facts about the company’s business operations and prospects. Specifically, KBR is accused of making false and/or misleading statements and/or failed to disclose: (1) that the Company had improperly estimated costs to complete certain contracts; (2) that the Company had accounting errors resulting from timing of the recognition of revenues and from understating its income tax provision; (3) that, as a result, the Company’s revenue and financial results were overstated; (4) that, as such, the Company’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); (5) that the Company lacked adequate internal and financial controls; and (6) that, as a result of the foregoing, the Company’s financial statements were materially false and misleading at all relevant times.
This action seeks to recover the damages caused by the Defendants’ misconduct.