SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in Horsehead Holding Corp. of Clas...
June 03 2016 - 5:31PM
Pomerantz LLP announces that a class action lawsuit has been filed
on behalf of Horsehead Holding Corp. (“Horsehead” or the “Company”)
(NASDAQ:ZINC) shareholders against certain officers of
Horsehead. The class action, filed in United States
District Court, District of Delaware, and docketed under
16-cv-00369, is on behalf of a class consisting of all persons or
entities who purchased or otherwise acquired Horsehead securities
between May 21, 2014 and February 2, 2016 inclusive (the “Class
Period”). This class action seeks to recover damages against
Defendants for alleged violations of the federal securities laws
under the Securities Exchange Act of 1934 (the “Exchange
Act”).
If you are a shareholder who purchased or
otherwise acquired Horsehead securities during the Class Period,
you have until June 21, 2016 to ask the Court to appoint you as
Lead Plaintiff for the class. A copy of the Complaint can be
obtained at www.pomerantzlaw.com. To discuss this action,
contact Robert S. Willoughby at rswilloughby@pomlaw.com or
888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who
inquire by e-mail are encouraged to include their mailing address,
telephone number, and number of shares purchased.
[Click here to join this class
action]
Horsehead, together with its subsidiaries, is a
leading U.S. producer of zinc metal and a leading recycler of
electric arc furnace (“EAF”) dust. The Company derives the majority
of its revenues from the sale of zinc.
The Complaint alleges that throughout the Class
Period, defendants made materially false and misleading statements
regarding the Company’s business, operational and compliance
policies. Specifically, defendants made false and/or misleading
statements and/or failed to disclose that: defendants provided
operational updates that misstated the extent and seriousness of
the Mooresboro Facility’s problems, provided zinc production
figures detached from the widespread and unsolved defects
throughout the production process, and failed to disclose cash and
revenue shortfalls that threatened the Company’s ability to pay its
creditors and complete the facility’s ramp-up.
On January 23, 2015, Horsehead conducted a
secondary offering of 5.75 million shares of its common stock at
$12.75 per share (the “Secondary Offering”). As a result of the
Secondary Offering, the Company generated approximately $73 million
in gross offering proceeds. The registration statement
(“Registration Statement”), which incorporated a prospectus
supplement (“Prospectus”), issued in connection with the Secondary
Offering contained false and misleading statements of fact and
failed to disclose facts required to be disclosed therein under the
rules and regulations regarding its preparation.
Then, in a series of partial disclosures,
Horsehead revealed in piecemeal fashion various production problems
at the Mooresboro Facility. Although defendants disclosed certain
production issues at the Mooresboro Facility, they falsely assured
investors that the problems were minor in nature, fixable and would
not threaten the viability of the facility, the new production
processes being used, or the Company’s long-term business and
prospects.
Approximately one month later, on December 10,
2015, ratings agency Moody’s downgraded the Company’s corporate
debt from B3 to Caa2 on a negative outlook due to recurring
problems at the Mooresboro Facility. By early January 2016, the
Company had failed to make a $1.8 million interest payment to
certain holders of the Company’s convertible senior notes and
shortly thereafter defaulted on multiple credit agreements.
On January 22, 2016, Horsehead announced that it
was idling the Mooresboro Facility and laying off most employees at
the site.
On February 2, 2016, Horsehead announced that it
had initiated bankruptcy proceedings under Chapter 11 of the U.S.
Bankruptcy Code. That same day, the Company filed a plan for
restructuring based on its discussions with secured creditors that
revealed “‘[m]ajor [b]ottlenecks” at the Mooresboro Facility. The
filing stated that “[s]ignificant issues” plagued several steps in
the zinc production and recycling process, including: (i)
solid/liquid separation; (ii) depletion; (iii) bleed treatment; and
(iv) cementation. The filing also stated that gypsum precipitation
and lead/silver recovery at the plant suffered from “equipment
sizing issues,” and that all steps of the production process had at
least “[l]imited issues.” In addition, the filing stated that it
would take approximately $81.9 million and over two
years to get the facility back on track.
On February 11, 2016, trading in Horsehead stock
was suspended. On February 23, 2016, Horsehead filed a notice on
Form 25-NSE that its common stock had been removed from listing on
the NASDAQ stock exchange.
The Pomerantz Firm, with offices in New York,
Chicago, Florida, and Los Angeles, is acknowledged as one of the
premier firms in the areas of corporate, securities, and antitrust
class litigation. Founded by the late Abraham L. Pomerantz, known
as the dean of the class action bar, the Pomerantz Firm pioneered
the field of securities class actions. Today, more than 80 years
later, the Pomerantz Firm continues in the tradition he
established, fighting for the rights of the victims of securities
fraud, breaches of fiduciary duty, and corporate misconduct. The
Firm has recovered numerous multimillion-dollar damages awards on
behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
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