McDermott International, Inc. Class Action Lawsuit
- Company Name
- McDermott International, Inc.
- Stock Symbol
- Class Period
- September 20, 2019 to January 23, 2020
- Southern District of Texas
The McDermott International, Inc. class action lawsuit charges certain McDermott officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of McDermott common stock between September 20, 2019 and January 23, 2020, inclusive (the “Class Period”). The McDermott class action lawsuit was commenced on July 17, 2020 in the Southern District of Texas and is captioned Ahnefeldt v. Dickson, No. 20-cv-02539.
McDermott described itself as a “premier, fully-integrated provider of technology, engineering and construction solutions to the energy industry.” On December 13, 2019, McDermott issued a press release stating that it had received a notice of non-compliance from the New York Stock Exchange (“NYSE”) and that it intended to cure the deficiency.
The McDermott class action lawsuit seeks relief in connection with an alleged scheme to deceive the investing marketplace about McDermott’s true financial condition, artificially inflate the market price of McDermott common stock and other publicly traded securities, and cause investors to purchase McDermott common stock and other publicly traded securities at artificially inflated prices.
After assuring investors that McDermott’s financial and operating condition was improving and that it had a long-term balance sheet solution to right the ship, on January 21, 2020, defendants authorized the filing of a Chapter 11 petition on behalf of McDermott following the approval and entry of a restructuring support agreement that was not presented to shareholders. Defendants then caused McDermott to publicly disclose for the first time that McDermott had liquidity problems that could not be cured outside of the bankruptcy process. McDermott additionally announced that it expected the NYSE to delist McDermott’s common stock. Pursuant to the Chapter 11 plan of reorganization, McDermott would eliminate over $4.6 billion in debt from its balance sheet, with secured lenders receiving an initial 94% of all of McDermott’s new equity. Pursuant to the plan, McDermott shareholders, including those who purchased shares of McDermott common stock during the Class Period and were told to ignore rumors of an imminent bankruptcy, were to be eliminated as McDermott equity owners. On this news, trading of McDermott common stock was halted pre-market, and trading did not resume until January 23, 2020. On January 23, 2020, the price of McDermott common stock fell nearly 83%.
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