RADNOR, Pa., Oct. 15, 2015 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP announces that a shareholder class action lawsuit has been filed against Fifth Street Finance Corp. (Nasdaq: FSC) ("Fifth Street" or the "Company") on behalf of purchasers of the Company's securities between July 7, 2014 and February 6, 2015, inclusive (the "Class Period").
Fifth Street shareholders who wish to discuss this action and their legal options are encouraged to contact Kessler Topaz Meltzer & Check, LLP (Darren J. Check, Esq., D. Seamus Kaskela, Esq. or Adrienne O. Bell, Esq.) at (888) 299 – 7706 or at [email protected]. For additional information about this lawsuit, or to request information about this action online, please visit http://www.ktmc.com/new-cases/fifth-street-finance-corp.
Fifth Street is a specialty finance company that lends to and invests in small and mid-sized companies, primarily in connection with investments by private equity sponsors. Fifth Street Asset Management ("FSAM") is the asset manager and investment advisor for Fifth Street, and annually receives millions of dollars for providing investment advisory services to Fifth Street. During October 2014, FSAM (Nasdaq: FSAM) completed its initial public offering ("IPO") of common stock by selling 6 million shares of stock to investors at $17.00 per share, for proceeds of over $100 million.
The Complaint alleges that Fifth Street and certain of its executive officers made a series of false and misleading statements during the Class Period, and failed to disclose material adverse facts about the Company's business, operations, and prospects. Among other things, the Complaint alleges that the defendants: (i) pushed Fifth Street into increasingly risky, speculative investments at unsustainable leverage levels, and delayed writing down impaired investments in order to create the appearance of increasing revenues for FSAM; (ii) actively concealed the deteriorating credit quality of Fifth Street's portfolio and delayed the recognition of write-downs and investment losses until after FSAM completed its IPO; and (iii) systematically overstated the income generated by Fifth Street's investments and the fair value of its portfolio.
On February 9, 2015, Fifth Street reported its financial and operational results for the quarter ended December 31, 2014. As more fully detailed in the Complaint, for the quarter Fifth Street reported that it had moved $106 million worth of investments to non-accrual status with an additional $17 million likely to be designated as non-accrual in the subsequent quarter. Fifth Street also reported that the Company's net investment income had decreased by 6% compared to the prior quarter, and that it would not issue a dividend for February 2015.
On this news, shares of Fifth Street's common stock declined $1.27 per share, or almost 15%, to close on February 9, 2015 at $7.22 per share, on heavy trading volume.
Fifth Street shareholders who purchased their securities during the Class Period may, no later than November 30, 2015, petition the Court to be appointed as a lead plaintiff of the class.
A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. In order to be appointed as a 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 in the action. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check. For more information about Kessler Topaz Meltzer & Check, or for additional information about participating in this action, please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
Darren J. Check, Esq.
D. Seamus Kaskela, Esq.
Adrienne O. Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(888) 299 - 7706
(610) 667 - 7706
SOURCE Kessler Topaz Meltzer & Check, LLP