Robbins Arroyo LLP: Adeptus Health Inc. (ADPT) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Adeptus Health Inc. (NYSE: ADPT) in the U.S. District Court for the Eastern District of Texas, Sherman Division. The complaint is brought on behalf of all purchasers of Adeptus securities between June 25, 2014 and November 1, 2016, for alleged violations of the Securities Exchange Act of 1934 by Adeptus’s officers and directors. Adeptus owns and operates a network of independent freestanding emergency rooms in the United States.
Adeptus Accused of Engaging in Unethical Billing Practices
According to the complaint, Adeptus held its initial public offering on June 25, 2014 of 5.3 million shares and received net proceeds of approximately $96.2 million. On May 11, 2015, Adeptus held its secondary public offering (“SPO”) of 1.6 million shares for $94.5 million; on July 31, 2015, Adeptus held another SPO, selling 2.6 million shares for $265.9 million; and on June 8, 2016, Adeptus completed another SPO, offering 1.7 million shares for $107.4 million. The complaint alleges that Adeptus’ offering documents failed to disclose material adverse facts about the company’s business, operations, and future prospects. Further, Adeptus officials allegedly did not disclose that: (i) Adeptus was engaged in the widespread overbilling of patients; (ii) Adeptus’s billing practices were causing decreases in patient volume and would subject it to decreased revenues; (iii) the company’s billing practices exposed it to major financial, reputational, legal, and regulatory risks; and (iv) the company’s financial statements were not in compliance with Generally Accepted Accounting Principles.
On November 1, 2016, Adeptus released its third quarter earnings results, disclosing that it missed earnings estimates and reported a net loss of $11.7 million in the third quarter of 2016. The company reduced its adjusted guidance for earnings before interest, taxes, depreciation, and amortization for the full year and admitted that it needed to secure emergency financing of $27.5 million from existing investors. The company cited weaker than expected volumes in non-hospital outpatient department markets, collection issues associated with its third party billing agent, and higher costs associated with the opening of three hospitals in the second half of the year. On this news, Adeptus’s stock dropped $21.52 per share, or over 71%, to close at $8.60 per share on November 2, 2016.
Adeptus Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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