Cases

City of Miami General Employees’ & Sanitation Employees’ Retirement Trust v. Venator Materials PLC

Court: United States District Court of the Southern District of New York
Case Number: 1:19-cv-07182
Class Period: 08/02/2017 - 10/29/2018
Case Contacts: Avi Josefson, Michael D. Blatchley, Scott R. Foglietta

Securities class action lawsuit against Venator Materials PLC (“Venator” or the “Company”) (NYSE: VNTR), and certain of the Company’s senior executives, the Company’s controlling shareholder, Venator’s Board of Directors, and the lead underwriters of the Company’s Offerings (collectively, “Defendants”).  The action, which is captioned City of Miami General Employees’ & Sanitation Employees’ Retirement Trust v. Venator Materials PLC, No. 1:19-cv-07182 (S.D.N.Y.), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”) on behalf of investors in Venator ordinary shares during the time period of August 2, 2017 and October 29, 2018, inclusive (the “Class Period”).  The action also asserts claims under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (“Securities Act”) on behalf of all persons who purchased or otherwise acquired Venator ordinary shares in or traceable to the Company’s initial public offering of ordinary shares conducted on or around August 3, 2017 (the “IPO”), and secondary public offering of ordinary shares conducted on or around December 4, 2017 (the “SPO,” and together with the IPO, the “Offerings”).

Venator was previously organized as the Pigments & Additives division within Huntsman Corporation (“Huntsman”), a multinational manufacturer of chemical products.  In August 2017, Huntsman offered shares of Venator to the public through an initial public offering (“IPO”).  Months earlier, however, on January 30, 2017, a fire had ravaged one of Venator’s key chemical manufacturing plants located in Pori, Finland. 

The Complaint alleges that in connection with its IPO and its December 2017 secondary stock offering, and continuing throughout the Class Period, Defendants misrepresented the true extent of the fire damage to Venator’s Pori facility, the cost to rehabilitate the facility, and the impact on Venator’s business and operations.  The Company also assured investors that the Pori facility would be rebuilt with insurance proceeds within its policy limits.  Throughout the Class Period, Venator and its executives continued to assure investors that the rebuild of the Pori facility was on track and that the Company would be able to fully recoup the production capacity lost in the fire.  As a result of these misrepresentations, Venator shares traded at artificially inflated prices throughout the Class Period. 

The truth began to emerge on July 31, 2018, when Venator revealed that the fire damage at the Pori facility was far more extensive than Defendants had previously represented to investors.  Specifically, Venator announced that the cost to repair the facility had climbed to more than $375 million above the insurance policy limits, more than double the amount disclosed to investors just two months after the IPO.  On this news, the price of Venator shares declined from $15.35 per share to $14.62 per share.

Then, on September 12, 2018, Venator announced that it was abandoning the Pori facility altogether, despite the Company’s previous assurances that the site would be repaired and restored back to its full operating capacity.  The Company also revealed that the facility was still only operating at 20% capacity and thus had not increased production by any meaningful amount during the thirteen months since the IPO.  During an investor conference call held later that same day, Venator’s Chief Executive Officer (“CEO”), Defendant Simon Turner, admitted that the Company had misrepresented the true extent of the fire damage.  When asked by an analyst whether Venator had provided a “misestimate of the initial amount of damage from the fire” and whether “the actual work that needed to be done was missed,” CEO Turner agreed that “it was a combination of factors, both of which, you’ve mentioned already.”  These disclosures caused the price of Venator shares to decline from $11.35 per share to $10.81 per share.

Finally, on October 30, 2018, Venator announced that, in addition to the over $500 million in costs and lost business associated with the Pori fire incurred to date, the Company incurred a restructuring expense of approximately $415 million and would incur additional “charges of $220 million through the end of 2024” related to the Pori site.  As a result of these disclosures, the Company’s stock price declined from $8.00 per share to $6.47 per share, or more than 19%.

If you wish to serve as Lead Plaintiff for the Class, you must file a motion with the Court no later than September 30, 2019, which is the first business day on which the U.S. District Court for the Southern District of New York is open that is 60 days after the publication date of July 31, 2019.  Any member of the proposed Class may move the Court to serve as Lead Plaintiff through counsel of their choice.  Members may also choose to do nothing and remain part of the proposed Class.

 If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Avi Josefson of BLB&G at 212-554-1493, or via e-mail at avi@blbglaw.com.

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