KinderCare Learning (KLC) Faces IPO Investor Securities Class Action Amid Claims of Child Neglect - Hagens Berman

SAN FRANCISCO, Aug. 19, 2025 /PRNewswire/ -- A securities class action lawsuit styled Gollapalli v. KinderCare Learning Companies, Inc., et al., No. 3:25-cv-01424 (D. Or.) has been filed and seeks to represent investors who purchased KinderCare (NYSE: KLC) common stock in or traceable to the company's October 2024 IPO.  

Hagens Berman urges KinderCare investors who suffered substantial losses to submit your losses now. The firm also encourages persons with knowledge who may be able to assist in the investigation to contact its attorneys.

Class Period: Purchasers in KinderCare October 2024 IPO
Lead Plaintiff Deadline: Oct. 14, 2025
Visit: www.hbsslaw.com/investor-fraud/klc
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KinderCare Learning Companies, Inc. (KLC) Securities Class Action:

KinderCare is the largest provider of early childhood education in the United States. Over 30% of KinderCare's revenues come from federal subsidies, primarily provided through the Child Care Development Fund, as authorized under the Child Care & Development Block Grant, a federal program that provides funding to states to assist low-income families with child care costs.

On October 8, 2024, KinderCare priced 27 million shares offered to investors in its IPO at $24 per share for total gross proceeds of $648 million. October 9, 2024, marked the first day of trading of the newly-public company's common stock.

The lawsuit is focused on the propriety of KinderCare's disclosures concerning the quality of its care and education that the company purportedly provided "throughout" its history, and the nature and magnitude of risks investors faced at the time of its IPO.

More specifically, KinderCare's offering documents assured investors of the "unwavering" and "constant" "high-quality" care that the company's teachers and employees provided to "each" student and their families, going so far as to describe the child care offered by KinderCare as "the highest quality care possible" and a "safe, nurturing and engaging environment."

The complaint alleges that KinderCare's IPO offering documents were false and misleading because they failed to disclose crucial information to investors, including that:

• numerous incidents of child abuse, neglect, and harm had occurred at KinderCare facilities;
• KinderCare did not provide the "highest quality of care possible" at its facilities, and, indeed, in numerous instances had failed to provide even basic care, meet minimum standards in the child care industry, or comply with the laws and regulations governing the care of children; and
• as a result, KinderCare was exposed to material, undisclosed risks of lawsuits, adverse regulatory actions, negative publicity, reputational damage, and business loss.

Investors began to learn the truth on April 3, 2025, when The Bear Cave analyst, Edwin Dorsey, published a comprehensive, scathing research report. Dorsey said he found that "toddlers escape from the KinderCare daycares onto busy roads, are left alone locked inside KinderCare buildings and buses, and are physically, verbally, and sexually abused, with many cases going unreported until bystanders raise alarm or video evidence circulates."

Then, on June 5, 2025, Dorsey published a second report observing that allegations against KinderCare are growing and that certain lawmakers are demanding the company's accountability, with one reportedly tweeting "If you can't keep children safe – and worse, are complicit in their abuse – you do NOT deserve a dime of taxpayer funding."

Unsurprisingly, these and other revelations have driven the price of KinderCare shares substantially below the $24 IPO price. In addition, since going public, most recently on August 12, 2025, the company has reported disappointing financial results citing softening or declining enrollment.

"We're concerned about KinderCare's reported conduct, and investigating whether the company should have disclosed to its IPO investors its alleged failure to meet basic care standards," said Reed Kathrein, the Hagens Berman partner leading the investigation.

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