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Thursday, August 22, 2019

McDermott International stockholder files suit over merger with Chicago Bridge & Iron


By Jenie Mallari-Torres | Feb 13, 2019

HOUSTON (Legal Newsline) – A stockholder of McDermott International alleges it has suffered significant losses and damages because of a misleading proxy statement disseminated before a vote on a merger.

The Public Employees’ Retirement System of Mississippi filed a complaint individually and on behalf of all others similarly situated on Jan. 14 in the U.S. District Court for the Southern District of Texas against McDermott International Inc., David Dickson and Stuart Spence alleging violation of federal securities law.

According to the complaint, in December 2017, the defendants announced a merger with Chicago Bridge & Iron Co. and the combination was subject to a majority vote of McDermott shareholders.

The plaintiff alleges to proxy statement disseminated to McDermott's shareholders in April 2018 in connection with the merger was materially false and misleading and failed to disclose material facts about the business, operations and prospects of Chicago Bridge & Iron. The suit states the merger was approved and in October 2018, McDermott's reported third quarter results "fell far below analysts' estimates."

"Most significantly, the company reported a $744 million change in the value of projects it acquired from CB&I," the suit states. "...On this news, McDermott's share price fell $5.14 per share, nearly 40 percent, to close at $7.73 per share on Oct. 31, 2018, on unusually heavy trading volume."

The plaintiff holds McDermott International Inc., Dickson and Spence responsible because the defendants allegedly solicited approval for the merger with a proxy statement that contained false and misleading statements.

The plaintiff requests a trial by jury and seeks judgment against the defendants, determine class action, award damages, and further relief as the court may deem just. It is represented by Jeffrey W. Chambers of Wolf Popper LLP in Houston.

U.S. District Court for the Southern District of Texas case number 4:19-cv-00135

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Houston Division of the Southern District of Texas

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