Peabody Energy Corporation Class Action Lawsuit
- Company Name
- Peabody Energy Corporation
- Stock Symbol
- Class Period
- April 3, 2017 to October 28, 2019
- Southern District of New York
The Peabody Energy Corporation class action lawsuit charges Peabody Energy and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of Peabody Energy common stock between April 3, 2017 and October 28, 2019, inclusive (the “Class Period”). The Peabody Energy class action lawsuit was commenced on September 28, 2020 in the Southern District of New York and is captioned Oklahoma Firefighters Pension and Retirement System v. Peabody Energy Corporation, No. 20-cv-08024.
Peabody Energy is currently the largest coal mining company in the world, with 23 coal mines throughout the United States and Australia. One of its mines in Australia is the North Goonyella mine, which was acquired by Peabody Energy in 2004 and through which Peabody Energy ships coal to customers in India, China, and South Korea. As of the start of the Class Period, the North Goonyella mine was considered Peabody Energy’s most profitable single operation.
The Peabody Energy class action lawsuit alleges that during the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (a) Peabody Energy had failed to implement adequate safety controls at the North Goonyella mine to prevent the risk of a spontaneous combustion event; (b) Peabody Energy failed to follow its own safety procedures; (c) as a result, the North Goonyella mine was at a heightened risk of shutdown; (d) Peabody Energy’s low-cost plan to restart operations at the North Goonyella mine posed unreasonable safety and environmental risks; (e) the Australian body responsible for ensuring acceptable health and safety standards, the Queensland Mines Inspectorate (“QMI”), would likely mandate a safer, cost-prohibitive approach; and (f) as a result, there would be major delays in reopening the North Goonyella mine and restarting coal production.
On September 28, 2018, a fire erupted at the North Goonyella mine, forcing Peabody Energy to suspend operations indefinitely. On this news, Peabody Energy shares fell more than 13%.
Then, on February 6, 2019, Peabody Energy revealed that contrary to previous statements, production at the North Goonyella mine would not resume in 2019, but was instead now targeted to begin to ramp in the early months of 2020. On this news, the price of Peabody Energy shares fell by more than 10%.
Subsequently, on May 1, 2019, Peabody Energy reported that it had received a directive from QMI which could lead to further delays and necessitate a re-evaluation of Peabody Energy’s reentry plan. On this news, the price of Peabody Energy shares fell more than 5%.
Thereafter, on July 31, 2019, Peabody Energy reported additional delays to the reentry of North Goonyella, explaining that QMI’s requirements had resulted in a slower rate of progress than Peabody Energy’s initial plan had contemplated. As a result, Peabody Energy suspended its 2020 production guidance at the mine and informed investors that it was reevaluating its entire reentry plan. On this news, the price of Peabody Energy shares fell by nearly 5%.
Then, on August 9, 2019, QMI released a one-page document with its preliminary investigative findings indicating that Peabody Energy had deficient safety systems at North Goonyella and that Peabody Energy was not cooperating fully with its investigation. On this news, the price of Peabody Energy shares fell 2%.
Finally, on October 29, 2019, Peabody Energy disclosed that QMI was placing strict restrictions on restarting operations at the North Goonyella mine and that as a result Peabody Energy was forced to drastically adjust the reentry plan, ultimately announcing a three year or more delay before any meaningful coal could be produced. On this news, the price of Peabody Energy shares fell more than 22%, further damaging investors.
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