$26 Million Recovered for EnergySolutions Shareholders
After more than three years of litigation against EnergySolutions (“ES”) and the other defendants, including its officers and directors and lead underwriters, lead plaintiffs Building Trades United Pension Trust Fund, New England Carpenters Guaranteed Annuity and Pension Funds, and City of Roseville Employees’ Retirement System, with Robbins Geller as counsel, have successfully recovered $26 million for themselves and other ES shareholders. The action stems from claims that defendants misrepresented and omitted material facts about ES and its business in its prospectuses and registration statements for its initial public offering and secondary offering and at other times during the November 14, 2007 through October 14, 2008 class period. The settlement was approved by the Honorable John G. Koeltl on March 14, 2013.
ES was created from a combination of existing nuclear engineering, waste removal and cleanup companies acquired by a holding company, ENV Holdings LLC. All but two of the individual defendants held some interest in ENV. The November 2007 initial public offering of ES common stock and subsequent offering in July 2008 raised hundreds of millions of dollars and millions of dollars in fees were paid to the underwriters.
Lead plaintiffs defeated defendants’ motion to dismiss the amended class action complaint, which was filed on August 4, 2012. Notably, following the initial motion to dismiss briefing, the parties were asked to submit additional letter briefs on any effects that the then recently decided Supreme Court case of Janus Capital Group, Inc. v. First Derivative Traders, 131 S. Ct. 2296 (2011), might have on the ES case in determining ENV’s liability under Section 10(b) of the Securities Exchange Act of 1934. The court sustained a large portion of the amended class action complaint and issued one of the first – and leading – district court opinions interpreting Janus.
As lead plaintiffs were developing evidence to prove their claims, the parties participated in a mediation and ultimately reached an agreement-in-principle to settle the action for $26 million in cash.
“A recovery of $26 million is an excellent result for aggrieved shareholders and is a reflection of Robbins Geller’s hard work and tireless efforts,” said Robbins Geller partner Evan J. Kaufman. “Robbins Geller, on behalf of the lead plaintiffs, went to bat for the EnergySolutions shareholders when no one else would.” Kaufman was referring to the fact that lead plaintiffs were the only ES class members that filed a complaint or sought appointment as lead plaintiff. Had it not been for lead plaintiffs’ participation in the litigation, ES shareholders would have received nothing. Robbins Geller attorneys prosecuting this action include Samuel H. Rudman, Evan J. Kaufman and William J. Geddish.
City of Roseville Employees’ Retirement System v. EnergySolutions, Inc., No. 09-cv-08633 (S.D.N.Y.).