NEW YORK, July 2, 2015 /PRNewswire/ -- Bernstein Liebhard LLP today alerts investors that a class action has been commenced in the United States District Court for the Middle District of Florida on behalf of purchasers (the "Class") of Rayonier Advanced Materials, Inc. ("RYAM" or the "Company") (NYSE: RYN) common stock during the period of June 30, 2014 and January 28, 2015, (the "Class Period"). The deadline to file a motion for lead plaintiff in a securities class action against RYAM expires in four days, on July 6, 2015.
The complaint charges RYAM and certain of its officers and directors with violations of the Securities Exchange Act of 1934. RYAM manufactures and sells specialty cellulose fibers, which are used in consumer-oriented products such as cigarette filters, liquid crystal displays, impact-resistant plastics, thickeners for food products, pharmaceuticals, and cosmetics. RYAM previously existed as the Performance Fibers Division of Rayonier, Inc. ("Rayonier"); however, on January 30, 2014, Rayonier completed a spin-off of its Performance Fibers business, which resulted in two independent, publicly traded companies, with the Performance Fibers business being spun-off to Rayonier shareholders. Pursuant to the terms of the separation agreement between RYAM and its former parent company, RYAM assumed the liabilities of numerous operational and non-operational facilities. RYAM also incurred approximately $950 million of new debt to effect the separation. Approximately $906 million of borrowings from the debt issuance was distributed back to Rayonier.
The complaint alleges that RYAM knowingly and/or recklessly made false and/or misleading statements and omissions relating to RYAM's financial condition so that it could effectuate the spin-off and raise borrowings in the amounts and on terms that it otherwise would not have been able to receive. Specifically, RYAM improperly recorded and/or failed to disclose that RYAM failed to record material liabilities for environmental remediation and related obligations in its financial statements, in violation of Generally Accepted Accounting Principles ("GAAP"). RYAM also failed to provide sufficient disclosure to investors to permit a meaningful evaluation of the true scope and extent of these environmental remediation and related liabilities, which were associated with decades of environmental pollution. These materially misleading misstatements and omissions regarding the Company's financial results occurred in large part because Defendants incorrectly accounted for its remediation and long-term monitoring and maintenance for environmental liabilities and thus, as a result, RYAM (a) understated its Environmental Reserves; (b) did not record appropriate reserves as required by GAAP; (c) did not disclose a range of possible reserves for probable and reasonably estimable environmental remediation and related liabilities as required by GAAP; (d) did not maintain adequate internal and financial controls.
Additionally, throughout the Class Period, including at the time of the spin-off, Defendants misled RYAM investors about the true demand for its products; namely acetate. While Defendants continually touted that acetate demand was growing, demand was actually slowing down, particularly because large customers in China had excessive inventories.
On November 10, 2014, Rayonier announced that it would be restating its financial results and that the quarterly reports issued for the fiscal periods ended March 31, 2014 and June 30, 2014 should no longer be relied upon. The Company disclosed that an internal review had uncovered issues relating to historical timber harvest levels, calculation of merchantable timber inventory, and resulting errors in the Company's reported depletion expenses. Specifically, Rayonier had incorrectly included in its merchantable timber inventory parcels of the land that were specially designated, environmentally protected, or otherwise restricted. Thus, Rayonier's depletion expenses were understated during the periods listed. The Company also admitted material weakness in its internal controls regarding merchantable timber inventory.
On this news, the price of the Company's stock price declined $2.51 per share, over 9%, on November 10, 2014 to close at $25.06 per share on November 11, 2014.
Then, on January 28, 2015, RYAM announced that it would be making massive adjustments to its environmental reserves. On this news, the Company's stock price declined $0.92 per share, or 5%, from $18.90 per share on January 27, 2015 to $17.98 per share on January 28, 2015.
Plaintiffs seek to recover damages on behalf of all Class members who purchased shares of RYAM common stock during the Class Period. If you purchased RYAM securities as described above, and lost over $100,000 (whether realized losses or unrealized losses on stock you still hold) on the transactions, you may wish to join in this action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than July 6, 2015.
A "lead plaintiff" is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.
If you are interested in discussing your rights as a RYAM shareholder and/or have information relating to the matter, please contact Joseph R. Seidman, Jr. at (877) 779-1414 or firstname.lastname@example.org.
Bernstein Liebhard LLP has pursued hundreds of securities, consumer and shareholder rights cases and recovered over $3 billion for its clients. The National Law Journal has recognized Bernstein Liebhard for twelve consecutive years as one of the top plaintiffs' firms in the country.
You can obtain a copy of the complaint from the clerk of the court for the United States District Court for the Middle District of Florida.
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SOURCE Bernstein Liebhard LLP