ROME, Ga. (Legal Newsline) – Global flooring manufacturer Mohawk is facing a securities class action filed by Mississippi's Public Employees' Retirement System claiming the company misled its investors.
Public Employees' Retirement System of Mississippi, individually and on behalf of all other similarly situated, filed a complaint Jan. 3 in the U.S. District Court for the Northern District of Georgia Rome Division against Mohawk Industries Inc. and others alleging violation of federal securities laws.
The plaintiff purchased Mohawk common stock between April 28, 2017, and July 25, 2019. According to the suit, Mohawk entered into a $1.2 billion deal on June 15, 2015, to invest in luxury vinyl tile (LVT) production. When Mohawk struggled to keep up with LVT consumer demand, the plaintiffs allege the company engaged in a "scheme."
"Defendants engaged in a scheme to 'channel stuff' its conventional flooring products – that is, they induced their distributors to take on surpluses of Conventional Flooring Products that were vastly greater than demand – in an effort to make Mohawk’s sales growth and financial performance appear far better than they were," the suit states.
The plaintiff alleges these actions led to the company's stock drop of nearly 18 percent in the third quarter of 2019.
The plaintiff seek compensatory damages, a trial by jury and all other just relief. It is represented by H. Lamar Mixson and Amanda Kay Seals of Bondurant Mixson & Elmore LLP in Atlanta.
U.S. District Court for the Northern District of Georgia Rome Division case number 4:20-CV-00005-ELR