Robbins Arroyo LLP: Southwestern Energy Company (SWN, SWNC) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Southwestern Energy Company (NYSE: SWN, SWNC) in the District Court of Harris County, Texas. The complaint is brought on behalf of all purchasers of Southwestern securities pursuant to the company’s January 15, 2015, convertible preferred stock offering (the “Offering”), for alleged violations of the Securities Act of 1933 by Southwestern’s officers and directors. Southwestern, an independent natural gas and oil company, explores for, develops, and produces natural gas and oil primarily in the United States.
Southwestern Accused of Misstating Its Debt Problems
According to the complaint, on January 15, 2015, Southwestern conducted the Offering, selling 30 million depositary shares at a price of $50 per share, and gaining net proceeds of $1.672 billion. Southwestern’s Registration Statement, filed with the U.S. Securities and Exchange Commission in support of the Offering, stated that the company’s long-term outlook for the business is favorable and that its resource base, financial strength, and disciplined capital would provide the company with an opportunity to grow through new exploration and development activities. However, the complaint alleges that the Registration Statement Southwestern issued contained misleading statements and omitted material information. Specifically, the company failed to disclose that it was experiencing severe liquidity and debt issues that threatened its ability to continue its drilling activities.
Approximately one year after the Offering, on January 21, 2016, Southwestern revealed in a letter to the Texas Workforce Commission that it would lay off 376 employees at its Spring, Texas office, a strategy that was part of the company’s larger workforce reduction plan to cut 1,100 positions. Then, on February 25, 2016, the company reiterated its “decision to temporarily halt its drilling activities.” On June 9, 2016, Southwestern announced that it sold 55,000 net acres of land in West Virginia for $450 million due to its looming debt obligations. Southwestern’s depositary shares (SWNC) have plummeted nearly 53% since the Offering, closing at $23.54 per share on November 1, 2016.
Southwestern 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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