A class-action lawsuit on behalf of shareholders who have suffered substantial losses was filed yesterday against Bristow Group in U.S. District Court for the Southern District of Texas, Houston Division. The civil suit charges Bristow CEO Jonathan Baliff and CFO L. Don Miller with multiple violations of U.S. securities rules beginning on Feb. 8, 2018, and running through Feb. 11, 2019, the date the company disclosed “material weakness” in its internal controls over financial reporting. That disclosure triggered a sell-off in Bristow stock.
Specifically, the suit charges that the defendants made “materially false and/or misleading statements as well as failed to disclose materially adverse facts about the company’s business, operations, and prospects” including the fact “that the company lacked adequate monitoring processes related to non-financial covenants within its secured financing and lease agreements." As a result, the suit alleges, "the company could not reasonably assure compliance with non-financial covenants…was reasonably likely to breach certain agreements…[and] had understated its short-term debt," while noting that "required corrections would materially impact financial statements." In addition, it said that since "there was material weakness in the company’s internal controls over financial reporting…[the] defendant’s positive statements about the company’s business, operations, and prospects were materially misleading and lacked a reasonable basis.”
The suit contends that Bristow’s alleged misstatements constitute violations of the Exchange Act. The suit characterizes these violations as “substantial acts in furtherance of the alleged fraud.” The suit charges that Baliff and Miller “knew that the adverse facts specified herein had not been disclosed to, and were being concealed from, the public, and that the positive representations which were being made were then materially false and/or misleading.” The suit alleges that Bristow’s failure to disclose resulted in its shares trading at inflated prices between February 2018 and February 2019, thereby damaging shareholders.
The lawsuit was filed by the Kendall Law Group of Dallas, and Glancy, Prongay & Murray of Los Angeles. Bristow did not respond to multiple inquiries from AIN seeking comment.