KNOXVILLE, Tenn. (Legal Newsline) – A stockholder of a Chattanooga, Tennessee wood pellet manufacturer alleges it was damaged by artificially inflated stock prices.
The city of Taylor General Employees Retirement System filed a complaint individually and on behalf of all other similarly situated on Feb. 1 in the U.S. District Court for the Eastern District of Tennessee, Southern Division against Astec Industries Inc., Benjamin G. Brock and David C. Silvious alleging violation of the Securities Exchange Act of 1934 and SEC Rule 10b-5.
According to the complaint, the plaintiff alleges that between July 26, 2016, and Oct. 22, 2018, (the class period) it purchased Astec stock. The plaintiff alleges during the class period, Astec did not disclose that its pellet plants "suffered from significant and costly problems that prevented them from running at their promised production capacity, posing a threat to the company’s pellet plant business, its overall financial performance, and its financial outlook."
The suit states when Astec revealed that margins were lower than expected in July 2017, stock prices declined and prices fell again in July 2018 after "disappointing" financial results were disclosed that month. The suit states stock prices fell for a third time in October 2018 after third quarter results were announced.
The plaintiff holds Astec Industries Inc., Brock and Silvious responsible because the defendants allegedly failed to disclose adverse facts known to them about the company, deceived the investing public regarding its prospects and business, and artificially inflated the price of Astec stock.
The plaintiff requests a trial by jury and seeks compensatory damages in an amount to be proven at trial, including interest; costs and expenses incurred including counsel fees and expert fees. It is represented by Jerry E. Martin and Christopher M. Wood of Robbins Geller Rudman & Dowd LLP in Nashville, Tennessee, Thomas C. Michaud of Vanoverbeke, Michaud & Timmony P.C in Detroit, Michigan and others.
U.S. District Court for the Eastern District of Tennessee Southern Division case number 1:19-cv-00024-PLR-CHS