Robbins Arroyo LLP: Vanguard Natural Resources, LLC (VNR) Misled Noteholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Vanguard Natural Resources, LLC (NASDAQGS: VNR) in the U.S. District Court for the Southern District of New York. The plaintiff brings the complaint on behalf of all persons who beneficially held 7.875% Senior Notes due 2020 from February 10, 2016 to the present, for the alleged violations of the Securities Act of 1933 by Vanguard’s officers and directors. Vanguard Natural Resources, LLC, through its subsidiaries, acquires and develops oil and natural gas properties in the United States.
Vanguard Natural Resources Officials Accused of Unjust Enrichment
According to the complaint, on January 8, 2016, Vanguard announced a proposed private debt exchange through which it would exchange and replace certain 2020 Notes for newly-issued 7.0% Senior Secured Second Lien Notes due 2023 (“the Exchange Offer”). Notably, only Qualified Institutional Buyers—generally those that own and invest at least $100 million in securities—and persons located outside of the U.S. were eligible to participate in the Exchange Offer. The plaintiff and class members could therefore not participate, nor did they receive documents informing them of how the Exchange Offer would affect their interests. Importantly, the risk of the Exchange Offer was not disclosed by the company in its offering prospectus for the 2020 Notes, nor could it have been foreseen by the class members at the time they purchased their 2020 Notes.
The complaint alleges that although Vanguard officials knew that the Exchange Offer would negatively impact the liquidity, marketability, and market price of the 2020 Notes, they concealed that information from the class members. The Exchange Offer allowed Vanguard officials to enrich themselves at the expense of the class members, whose 2020 Notes declined in value. Additionally, Vanguard’s decision to pursue the transaction benefitting only a minority of 2020 Note holders allegedly violated the implied covenant of good faith and fair dealing. Finally, the obligations in the 2020 Notes were made subordinate to the obligations in the 2023 Notes, impairing class members’ right to receive payment of the principal and interest under the 2020 Notes and the right to sue to compel such payment.
Vanguard Natural Resources Noteholders Have Legal Options
Concerned noteholders 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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