Robbins Umeda LLP* Files a Class Action Suit Against Certain Officers of Patriot Coal Corporation
Robbins Umeda LLP announces it has commenced a federal securities class action in the U.S. District Court for the Eastern District of Missouri, on behalf of purchasers of Patriot Coal Corporation (OTCQB: PCXCQ) (“Patriot Coal” or the “Company”) shares between October 21, 2010 and July 6, 2012 (the “Class Period”). Concerned shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly.
The complaint alleges that during the Class Period, certain of Patriot Coal’s officers issued materially false and misleading statements regarding the Company’s business prospects. Specifically, the complaint alleges that defendants violated Generally Accepted Accounting Principles and U.S. Securities and Exchange Commission (“SEC”) rules by failing to properly account for costs associated with Court-ordered remediation obligations related to the Company’s selenium water treatment requirements. In particular, defendants improperly capitalized these costs instead of recording them as expenses, thereby overstating the Company’s financial results.
In response to comments received from the SEC regarding the Company’s accounting for the Court-ordered remediation costs, defendants were forced to reveal that the Company’s previously issued consolidated financial statements for the years ended December 31, 2011 and December 31, 2010 should no longer be relied upon. Moreover, defendants admitted that it was necessary to restate the Company’s previously issued consolidated financial statements to accrue a liability and recognize a loss for the estimated costs of installing the Court-ordered water treatment facilities.
Further, the complaint alleges that the defendants were also making false and misleading statements about the Company’s business health and continuing prospects. In particular, the defendants continuously touted that the Company’s “operations are performing well” and that the Company is positioned for “future growth.” Then, on July 9, 2012, Patriot Coal shocked the market when it announced that it and substantially all of its wholly owned subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. When the true state of the Company’s business health became public, Patriot Coal’s shares dropped 72%, from a closing pricing of $2.19 on July 6, 2012, to a closing price of $0.61 at the end of the day on July 9, 2012.
If you purchased or otherwise acquired Patriot stock during the Class Period and wish to serve as lead plaintiff, you must move the court no later than November 21, 2012. To discuss your shareholder rights, please contact attorney Gregory E. Del Gaizo at 800-350-6003 or via the shareholder information form.
Robbins Umeda LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
* The firm name changed from Robbins Umeda LLP to Robbins Arroyo LLP on January 1, 2013.