Stockholders v VeraSun Energy Corp.
Stockholders File Lawsuit Against VeraSun Energy Corp.
According to a press release dated November 10, 2009, The complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Companys true financial condition, business and prospects. Specifically, the complaint alleges that defendants failed to disclose the following adverse facts, among others: (i) VeraSun was, in part, a speculative commodities trader in addition to an ethanol producer; (ii) VeraSun engaged in speculative and risky derivate transactions that exposed the Company to substantial financial and liquidity risk; (iii) VeraSun experienced substantial loses on speculative derivative transactions causing margin pressures on the Company; (iv) as a result of margin pressures from bad speculative derivative transactions, the Company sold out of a large short position in corn and incurred substantial losses; (v) the Company entered into highly risky accumulator contracts that obligated VeraSun to purchase increasing amounts of corn after the price of corn fell in price per bushel; and (vi) VeraSuns financial condition and especially its liquidity were negatively impacted as a result of speculative commodity transactions, ultimately causing the Company to file for bankruptcy.
On September 16, 2008, VeraSun announced that it commenced a public offering of 20 million shares of its common stock to raise money for general corporate purposes. The true purpose of this public offering was to raise capital in an effort to prevent a disastrous impact from the huge losses experienced by the Company as a result of its speculative trading and risky bets on the price of corn. In response to the Companys announcement on September 16, 2008, shares of the Companys stock fell $3.81 per share, or 70%, from a close of $5.22 per share before the announcement, to close at $1.41 per share on September 17, 2008, on extremely heavy trading volume.
If you bought VeraSun Energy Corp. securities and would like to obtain information about the VeraSun Energy Corp. 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
