Did KinderCare (KLC) Mislead IPO Investors? Lawsuit Alleges Company Concealed History of Child Safety Failures- Hagens Berman

KLC Investors with Losses Encouraged to Contact Hagens Berman

SAN FRANCISCO, Sept. 9, 2025 /PRNewswire/ -- A new securities class action lawsuit has been filed against KinderCare Learning Companies, Inc. (NYSE: KLC) and its executives, alleging the company misled investors during its October 2024 Initial Public Offering (IPO). The lawsuit, styled Gollapalli v. KinderCare Learning Companies, Inc., et al., seeks to represent investors who purchased KLC common stock in or traceable to the company's IPO. 

The lawsuit claims that KinderCare's IPO documents painted a false and misleading picture of the company's operations. While the company described its services as providing "the highest quality care possible" in a "safe, nurturing and engaging environment," the complaint alleges these statements were contradicted by a documented history of serious safety and care failures that were concealed from investors.

Hagens Berman urges KinderCare investors who suffered substantial losses to contact the firm now.

Class Period: Purchasers in KinderCare October 2024 IPO
Lead Plaintiff Deadline: Oct. 14, 2025
Visit: www.hbsslaw.com/investor-fraud/klc
Contact the Firm Now: [email protected]
                                       844-916-0895

Federal Subsidies and Unforeseen Risks

The lawsuit highlights that more than 30% of KinderCare's revenues come from federal subsidies, making the alleged omissions particularly significant. According to the complaint, the company's failure to disclose a history of child neglect and harm exposed it to a material, undisclosed risk of legal and regulatory action that could threaten this major revenue source.

Since the IPO, KinderCare's stock has performed poorly, dropping from its offering price of $24 per share to lows near $9 per share. The lawsuit attributes this decline to the market's realization that the company's positive statements were unfounded.

Hagens Berman's Investor Investigation

National plaintiffs' rights firm Hagens Berman is investigating these claims and encourages investors who purchased KLC stock in the IPO and suffered losses to consider their legal options. The firm is focused on the extent to which the company's alleged history of safety and care failures was concealed from the public, leading to an artificially inflated IPO price and subsequent investor losses.

"Our investigation is focused on the fundamental disconnect between how KinderCare presented itself to investors in its IPO and the alleged reality of its operations. The lawsuit claims investors were sold on a promise of 'high-quality care' while being kept in the dark about a history of safety and neglect issues. We are focusing on whether this alleged failure to disclose key risks to the business and revenue streams constitutes a violation of the U.S. securities laws."

If you invested in KinderCare and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now »

If you'd like more information and answers to frequently asked questions about the KinderCare case and our investigation, read more »

Whistleblowers: Persons with non-public information regarding KinderCare should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].

About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

SOURCE Hagens Berman Sobol Shapiro LLP