NEW YORK, May 27, 2016 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed on behalf of Horsehead Holding Corp. ("Horsehead" or the "Company") (NASDAQ: ZINC) shareholders against certain officers of Horsehead. The class action, filed in United States District Court, District of Delaware, and docketed under 16-cv-00369, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired Horsehead securities between May 21, 2014 and February 2, 2016 inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the "Exchange Act").
If you are a shareholder who purchased or otherwise acquired Horsehead securities during the Class Period, you have until June 21, 2016 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Horsehead, together with its subsidiaries, is a leading U.S. producer of zinc metal and a leading recycler of electric arc furnace ("EAF") dust. The Company derives the majority of its revenues from the sale of zinc.
The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: defendants provided operational updates that misstated the extent and seriousness of the Mooresboro Facility's problems, provided zinc production figures detached from the widespread and unsolved defects throughout the production process, and failed to disclose cash and revenue shortfalls that threatened the Company's ability to pay its creditors and complete the facility's ramp-up.
On January 23, 2015, Horsehead conducted a secondary offering of 5.75 million shares of its common stock at $12.75 per share (the "Secondary Offering"). As a result of the Secondary Offering, the Company generated approximately $73 million in gross offering proceeds. The registration statement ("Registration Statement"), which incorporated a prospectus supplement ("Prospectus"), issued in connection with the Secondary Offering contained false and misleading statements of fact and failed to disclose facts required to be disclosed therein under the rules and regulations regarding its preparation.
Then, in a series of partial disclosures, Horsehead revealed in piecemeal fashion various production problems at the Mooresboro Facility. Although defendants disclosed certain production issues at the Mooresboro Facility, they falsely assured investors that the problems were minor in nature, fixable and would not threaten the viability of the facility, the new production processes being used, or the Company's long-term business and prospects.
Approximately one month later, on December 10, 2015, ratings agency Moody's downgraded the Company's corporate debt from B3 to Caa2 on a negative outlook due to recurring problems at the Mooresboro Facility. By early January 2016, the Company had failed to make a $1.8 million interest payment to certain holders of the Company's convertible senior notes and shortly thereafter defaulted on multiple credit agreements.
On January 22, 2016, Horsehead announced that it was idling the Mooresboro Facility and laying off most employees at the site.
On February 2, 2016, Horsehead announced that it had initiated bankruptcy proceedings under Chapter 11 of the U.S. Bankruptcy Code. That same day, the Company filed a plan for restructuring based on its discussions with secured creditors that revealed "'[m]ajor [b]ottlenecks" at the Mooresboro Facility. The filing stated that "[s]ignificant issues" plagued several steps in the zinc production and recycling process, including: (i) solid/liquid separation; (ii) depletion; (iii) bleed treatment; and (iv) cementation. The filing also stated that gypsum precipitation and lead/silver recovery at the plant suffered from "equipment sizing issues," and that all steps of the production process had at least "[l]imited issues." In addition, the filing stated that it would take approximately $81.9 million and over two years to get the facility back on track.
On February 11, 2016, trading in Horsehead stock was suspended. On February 23, 2016, Horsehead filed a notice on Form 25-NSE that its common stock had been removed from listing on the NASDAQ stock exchange.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
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SOURCE Pomerantz LLP