NEW YORK, April 25, 2016 /PRNewswire/ -- Robbins Geller Rudman & Dowd LLP ("Robbins Geller") (http://www.rgrdlaw.com/cases/laquinta/) today announced that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of all those who purchased the common stock of La Quinta Holdings Inc. (NYSE:LQ) ("La Quinta") pursuant to the Company's secondary public offering (the "SPO") on or about March 24, 2015, seeking to pursue remedies under the Securities Act of 1933 (the "Securities Act"), as well as on behalf of purchasers of La Quinta common stock between February 25, 2015 and September 17, 2015, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act").
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or Mario Alba Jr. of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at [email protected]. If you are a member of this Class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/laquinta/. Any member of the putative 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.
The complaint charges La Quinta, certain of its officers and directors, The Blackstone Group L.P. and the lead underwriters of the SPO with violations of the Securities Act and/or the Exchange Act. La Quinta describes itself as a leading owner, operator and franchisor of select-service hotels serving primarily the midscale and upper-midscale markets.
The complaint alleges that the Registration Statement and Prospectus issued in connection with the SPO failed to disclose the following material trends, events and/or uncertainties: (i) the Company was experiencing declining customer demand in La Quinta's key Texas market; (ii) there were on-going disruptions caused by the transitioning of the Company's call center operations; and (iii) the Company was experiencing declining customer demand and market share losses due, in part, to certain of La Quinta's facilities being outdated and in need of major renovation, thereby necessitating that the Company make significant capital expenditures and undergo operational disruptions.
Moreover, the complaint alleges that throughout the Class Period, defendants failed to disclose material adverse facts about the Company's true financial condition, business and prospects. Specifically, defendants misrepresented and/or failed to disclose, among other things, the following adverse facts: (a) that there was a material slowdown in demand for its hotel rooms in its key Texas market during the Class Period; (b) that La Quinta was experiencing disruptions associated with a "transition" of the Company's reservation call center, which was having a material adverse effect on the Company's operations; (c) that La Quinta was facing market share losses and declining customer demand due, in part, to its outdated facilities; (d) that a significant number of La Quinta's hotels were in need of major renovation, which would require significant capital expenditures and result in operational disruptions; (e) that La Quinta had overstated the amounts buyers were willing to pay for certain of its properties; (f) that (a)-(e) above were reasonably likely to have a material adverse effect on La Quinta's future operating results; and (g) that, based on the foregoing, defendants lacked a reasonable basis for the Company's 2015 guidance and their positive statements about La Quinta's then-current business and future financial prospects.
On July 29, 2015, the Company announced its financial results for the second quarter of 2015, ended June 30, 2015. Among other things, La Quinta reported that the Company's earnings had been adversely affected by a $4 million loss on the sale of a property and an approximate $42 million impairment charge associated with the potential sale of 24 Company-owned hotels. In response to these revelations, the price of La Quinta common stock declined approximately 3.5% on July 30, 2015.
On September 17, 2015, La Quinta announced that it had further reduced its 2015 financial guidance and that its President and Chief Executive Officer had stepped down from his leadership positions in the Company by mutual agreement with the Company's Board of Directors. In response to these revelations, the price of La Quinta common stock declined more than 15% on September 18, 2015.
Plaintiff seeks to recover damages on behalf of all purchasers of La Quinta common stock pursuant to the SPO and during the Class Period (the "Class"). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller, with 200 lawyers in ten offices, represents U.S. and international institutional investors in contingency-based securities and corporate litigation. The firm has obtained many of the largest securities class action recoveries in history and was ranked first in both the amount and number of shareholder class action recoveries in ISS's SCAS Top 50 report for 2014. Please visit http://www.rgrdlaw.com/cases/laquinta/ for more information.
SOURCE Robbins Geller Rudman & Dowd LLP