|Court:||United States District Court for the Western District of Pennsylvania|
|Class Period:||06/19/2017 - 06/17/2019|
|Case Leaders:||Salvatore J. Graziano, Hannah Ross, Adam H. Wierzbowski, Jesse L. Jensen|
|Case Team:||Jai K. Chandrasekhar, Alexander T. Payne, Thomas Sperber, Ryan McCurdy, Jared Hoffman, Megan Taggart|
Securities class action lawsuit on behalf of Cambridge Retirement System against EQT Corporation (“EQT” or the “Company”) (NYSE: EQT) and certain of the Company’s senior executives (collectively, “Defendants”). The action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a), and SEC Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5, on behalf of investors who purchased EQT’s common stock between June 19, 2017 and June 17, 2019, inclusive (the “Class Period”).
The action also asserts claims under Section 14(a) of the Exchange Act, 15 U.S.C. § 78n(a), and SEC Rule 14a-9 promulgated thereunder, 17 C.F.R. § 240.14a-9, on behalf of shareholders of EQT and Rice Energy Inc. (“Rice”) who held EQT or Rice shares as of the record dates of September 25, 2017, and September 21, 2017, respectively, and were entitled to vote at an EQT or Rice special meeting on November 9, 2017 with respect to EQT’s acquisition of Rice, which closed on November 13, 2017. The action further asserts claims under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. §§ 77k, 77l, and 77o, on behalf of all persons who purchased or otherwise acquired EQT common stock in exchange for their shares of Rice common stock in the Acquisition.
The Complaint alleges that during the Class Period, Defendants falsely stated that EQT’s acquisition of Rice, a rival gas producer, would yield billions of dollars in synergies based on purported operational benefits. Specifically, on June 19, 2017, Defendants announced that EQT had entered into an agreement to acquire Rice for $6.7 billion. Defendants represented that because Rice had an acreage footprint largely contiguous to EQT’s existing acreage, the acquisition would allow EQT to achieve “a 50% increase in average lateral [drilling] lengths” (as opposed to more traditional vertical well drilling). EQT claimed that as a result, the merger would result in $2.5 billion in synergies, including $100 million in cost savings in 2018 alone.
After the closing in November 2017, the Company continued to tout the “significant operational synergies” of the merger. As a result of Defendants’ misrepresentations, EQT shares traded at artificially inflated prices throughout the Class Period.
On March 15, 2018, just five months after the acquisition closed, EQT announced the sudden and unexpected resignation of its CEO. Then, on October 25, 2018, the Company reported poor third-quarter financial results caused by an increase in total costs, and disclosed that its estimated capital expenditures for well development in 2018 would increase by $300 million. As a result, the Company reduced its full-year forecast for 2018. These disclosures caused EQT shares to decline by 13%, dropping from a close of $40.46 per share on October 24, 2018 to $35.34 on October 25, 2018.
In September 2019, the Court appointed BLB&G’s client the Government of Guam Retirement Fund as Co-Lead Plaintiff and BLB&G as Co-Lead Counsel. Per the schedule set by the Court, Lead Plaintiffs filed the Amended Complaint on December 6, 2019 and Defendants filed their motion to dismiss the Complaint on January 21, 2010. On February 21, 2020, when a federal District Judge (The Honorable Robert J. Colville) was first assigned to the case to replace the Magistrate Judge who had presided over the case, the Court adjusted the remaining briefing deadlines. Under the modified schedule, on March 6, 2020, Lead Plaintiffs filed their Opposition to Defendants’ motion to dismiss, and Defendants filed their reply brief on March 26, 2020. In December 2020, the Court denied Defendants’ motion to dismiss in its entirety. The parties are now conducting fact discovery.
We filed our motion for class certification in April 2021, and it was fully briefed in August 2021. The Court granted our motion in full in August 2022, certifying the Class for all of the asserted claims. Document discovery is substantially complete and we are taking depositions of witnesses. Fact discovery is to be completed by December 15, 2022, and expert discovery is to be completed by March 3, 2023.
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