Robbins Arroyo LLP: Teekay Corporation (TK) Misled Shareholders According to a Recently Filed Class Action
March 2, 2016 (San Diego, CA & Hamilton, Bermuda) – Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed against Teekay Corporation (NYSE: TK) in the U.S. District Court for the District of Connecticut. The plaintiff brings the complaint on behalf of all purchasers of Teekay common stock between June 30, 2015 and December 17, 2015, for the alleged violations of the Securities Act of 1934 by Teekay’s officers and directors. Teekay primarily provides crude oil and gas marine transportation services in Bermuda and internationally. It gets the majority of its cash flow from the distributions paid by its master limited partnerships (“MLPs”), Teekay LNG Partners LP (“TGP”) and Teekay Offshore Partners LP (“TOO”).
Teekay Accused of Misleading the Market About its Financial Condition
According to the complaint, on June 30, 2015, Teekay released its financial results for the second quarter 2015, announcing that it was increasing its dividend to $0.55 per share—a 75% increase. Then, on August 7, 2015, a Teekay official stated in an earnings call with analysts that its new dividend policy equates to an annualized dividend of $2.20 per share with future increases linked to the growing dividend cash flows it received from TGP and TOO. On November 6, 2015, Teekay held another earnings call with analysts, stating that it expected its dividend to further grow by an average of 15% to 20% per year for at least the next three years. However, the complaint alleges that these statements were misleading because the company knew, based on the facts at that time, that it could not support future dividend payments in excess of $0.55 per share, and the cash flows from the company’s MLPs could not possibly sustain such high dividends. Further, the company certainly could not increase the dividend in the years ahead.
On December 16, 2015, a mere month after Teekay made the above statements, the company issued a press release announcing that the Board of Directors had approved a plan to reduce the company’s quarterly dividend by 90%—from $0.55 per share to just $0.055 per share, commencing with the fourth quarter of 2015 dividend payable in February 2016. On this news, Teekay stock declined 58%, closing at $7.27 per share on December 17, 2015.
Teekay 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.