NEW YORK (Legal Newsline) - A Mexican airline is the subject of a federal securities class action lawsuit that alleges the company didn't disclose important financial information before its initial public offering.
The DeKalb County Employees Retirement System, of Georgia, filed the lawsuit on Feb. 24 against Volaris Aviation Holding Co., alleging the company didn't tell potential stockholders of two material events that could have affected its IPO. Volaris Aviation offers passenger and cargo service flights to the U.S. and Mexico.
The events included a change in the airline's reservation system and an expansion into the competitive Guadalajara and Tijuana, Mexico, markets, which could affect revenues and profit margins for Volaris, the suit says.
The company announced its IPO on Sept. 17, 2013, and sold more than 226 million American Depositary Shares for $12 each, the lawsuit said. Volaris shares on the New York Stock Exchange subsequently fell 23 percent and stood at approximately $9 per share when the lawsuit was filed, a plunge the suit blames on the eventual disclosure of the aforementioned corporate moves.
The lawsuit seeks class status for those that purchased Volaris American Depositary Shares during the company's IPO, and an unspecified amount of damages plus court costs. The plaintiff is represented by Samuel Rudman and Mario Alba Jr. of Robbins Geller Rudman & Down, LLP in Melville, N.Y.
United States District Court for the Southern District of New York case number 1:15-cv-01337