Stockholders v Textron Inc.
Stockholders File Lawsuit Against Textron Inc.
According to a press release dated August 13, 2009, the complaint alleges that, during the Class Period, defendants made materially false and misleading statements concerning Textrons stability and profitability by repeatedly publicizing record backlogs of unfilled customer orders for aircraft generated primarily by Cessna and by making positive statements about the Company's finance segment. As alleged in the complaint, these statements were materially false and misleading because defendants misrepresented and/or failed to disclose the following adverse facts, among others: (i) that Textron was accepting orders for business jets from a growing number of customers that were mere startup and/or financially distressed fleet operators who neither intended nor possessed the financial resources to pay for or take delivery of aircraft during 2008-09 and beyond, which materially inflated Textrons backlog of unfilled orders for the Companys Cessna segment, which in turn materially overstated the Companys current financial condition and future prospects; (ii) that hundreds of orders reported as backlog at Cessna for future business-jet production were subject to deferral and cancellation causing the Company to overstate its projected fiscal 2008-09 business-jet production and to initiate costly production cutbacks and worker reduction programs, which eroded Textrons revenues and earnings; (iii) that the Companys Finance segment had incurred material losses in the fair market value of its finance receivables and other financial assets, and these unrealized market losses were omitted from or misrepresented in the Companys periodic reports of earnings and income; and (iv) that Textrons credit ratings were deteriorating in light of its Finance segments losses and the additional debt the Company would incur in connection with its Finance segments distressed asset base.
On January 29, 2009, the last day of the Class Period, Textron announced that an estimated $30 million of the $65 million in restructuring costs would be incurred by the Companys Cessna segment due to production cutbacks and worker layoffs planned for the first quarter of 2009. After this announcement, Textron common stock traded to a new low of $8.83 per share before closing at $9.05 per share on volume of more than 26 million shares, a one day decline of $4.19, or 31%.
If you bought Textron Inc. securities and would like to obtain information about the Textron Inc. lawsuit, then you are invited to call Kahn Swick Foti, LLC toll free at (866) 467-1400 to speak with an attorney or visit www.ksfcounsel.com.
