Electrical Works Pension Fund, Local 103, I.B.E.W. v. Six Flags Entertainment Corporation
|Court:||United States District Court for the Northern District of Texas|
|Class Period:||04/25/2018 - 02/19/2020|
|Case Contacts:||Hannah Ross, Avi Josefson, Michael D. Blatchley|
On February 12, 2020, Bernstein Litowitz Berger & Grossmann filed a class action lawsuit for violations of the federal securities laws in the U.S. District Court for the Northern District of Texas against Six Flags Entertainment Corporation (“Six Flags” or the “Company”) and certain of the Company’s current and former senior executives (collectively, “Defendants”), on behalf of investors in Six Flags common stock between April 25, 2018 and February 19, 2020, inclusive (the “Class Period”).
BLB&G filed this action on behalf of its client, the Electrical Workers Pension Fund, Local 103, I.B.E.W., and the case is captioned Electrical Workers Pension Fund, Local 103, I.B.E.W. v. Six Flags Entertainment Corporation, No. 3:20-cv-00346 (N.D. Tex.). The complaint is based on an extensive proprietary investigation and a careful evaluation of the merits of this case. Click here to view the complaint, or click on the Case Documents tab on the left-hand side of the page.
Six Flags’ Alleged Fraud
Six Flags is the world’s largest regional theme park operator. The claims alleged in this case arise from Defendants’ misrepresentations and omissions relating to the Company’s prospects of developing Six Flags-branded parks in China through licensing agreements with Chinese real estate developer, Riverside Investment Group Co. Ltd. (“Riverside”), and the financial problems at Riverside.
The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and growth prospects related to its agreements with Riverside to develop parks in China. As development of those parks began to face delays, Defendants misled investors by downplaying the problems as “short-term” and “not material in the context of the long-term opportunity.” Defendants also assured investors that Riverside was “work[ing] through” the macroeconomic issues in China and that Riverside was in “great shape” financially. In truth, Riverside was in severe financial distress and did not have the resources to timely complete its projects with Six Flags. As a result of Defendants’ misrepresentations, shares of Six Flags’ common stock traded at artificially inflated prices throughout the Class Period.
The truth emerged through a series of disclosures, beginning on February 14, 2019, when Six Flags announced a negative $15 million revenue adjustment for the fourth quarter of 2018 due to delays in the expected opening dates of some of its China parks, which the Company falsely blamed on macroeconomic issues in China.
Then, on October 23, 2019, Six Flags again postponed the timing of its park openings in China, stating “it’s unrealistic to think it’s going to be exactly as we’ve outlined.”
Finally, on January 10, 2020, the Company disclosed that the development of its Six Flags-branded parks in China continued to encounter challenges and had not progressed as expected, placing the future of its China parks in jeopardy. The Company also revealed that Riverside continued to face significant financial challenges, which caused Riverside to default on its payment obligations to Six Flags. As a result of these disclosures, the price of Six Flags common stock declined precipitously.
If you wish to serve as Lead Plaintiff for the Class, you must file a motion with the Court no later than April 13, 2020, which is the first business day on which the U.S. District Court for the Northern District of Texas is open that is 60 days after the publication date of February 12, 2020. Any member of the proposed Class may move the Court to serve as Lead Plaintiff through counsel of their choice, or may choose to do nothing and remain a member 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 Michael D. Blatchley of BLB&G at 212-554-1281, or via e-mail at email@example.com.
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