Stockholders v EnergySolutions, Inc.
Stockholders File Lawsuit Against EnergySolutions, Inc.
According to a press release dated October 09, 2009, the complaint charges EnergySolutions, certain directors and officers of EnergySolutions, ENV Holdings, LLC (ENV Holdings) and the main underwriters for the Offerings, with violations of the Securities Act and the Exchange Act. EnergySolutions is a provider of specialized, technology-based nuclear services to government and commercial customers.
More than 30 million EnergySolutions shares were sold to investors in the IPO at $23 per share raising approximately $765.90 million and 40.25 million shares were sold to investors in the July 2008 Offering at $19 per share raising approximately $764.75 million. Prior to the IPO, ENV Holdings held 100% of the shares of EnergySolutions, sold millions of shares in the IPO, and sold 100% of the shares to investors in the July 2008 Offering.
The complaint alleges that, throughout the Class Period, and in the offering documents for the Offerings, defendants made numerous positive statements regarding the Companys financial condition, business and prospects. The complaint further alleges that these statements were inaccurate statements of material fact when made because defendants failed to disclose the following adverse facts, among others: (i) that economic problems in the United States and internationally were adversely affecting the Companys ability to secure projects which would adversely affect its future results; (ii) that statements in the Companys offering documents for the Offerings about the opportunities in the nuclear industry were materially misleading because EnergySolutions was not well situated in the near term to benefit from those opportunities; (iii) that on May 29, 2007 and prior to the IPO, the Company filed a petition for rulemaking (the Petition) requesting that the Nuclear Regulatory Commission (NRC) change well-established and longstanding regulations to allow funds from licensees decommissioning trust funds to be used for the cost of disposal of major radioactive components that have been removed from reactors before the permanent cessation of operations; (iv) that the business prospects of the Company, including the Companys license stewardship initiative, were heavily dependent upon a favorable ruling from the NRC on the Petition; (v) that by the time of the Petition, the NRC had already addressed and rejected the issue raised by EnergySolutions in the Petition; (vi) that the Company faced significant risks that the Petition would be rejected by the NRC because the NRC has long been clear that the purpose of the decommissioning trust funds is to ensure that licensees have adequate funds on hand for decommissioning activities at the time of license expiration; and (vii) that the rule change sought by the Petition was considerably more difficult and was much riskier than represented.
On October 14, 2008, EnergySolutions issued a press release that revealed, among other things, that the Company was reducing its estimates for net income, that the financial crisis would delay EnergySolutions ability to accelerate the decommissioning of nuclear power plant assets, and that the NRC denied the Petition for rulemaking change. Following this announcement, the price of EnergySolutions stock collapsed from $10.14 per share on October 13, 2008 to close at $5.64 per share on October 14, 2008 a one day decline of $4.50 per share or 44% on extremely heavy volume of 9.4 million shares.
If you bought EnergySolutions, Inc. securities and would like to obtain information about the EnergySolutions, Inc. lawsuit, then you are invited to call Kahn Swick & Foti, LLC toll free at (866) 467-1400 extension 100 to speak with an attorney or visit www.ksfcounsel.com.
