NEW YORK, Oct. 17, 2020 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Braskem S.A. ("Braskem" or the "Company") (NYSE: BAK) and certain of its officers. The class action, filed in the United States District Court for the District of New Jersey, and indexed under 20-cv-11366, is on behalf of a class consisting of all persons other than Defendants who purchased or otherwise acquired Braskem securities between May 6, 2016, and July 8, 2020, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Braskem securities during the Class Period, you have until October 26, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Braskem is headquartered in Camaçari, Bahia. The Company is purportedly the largest producer of thermoplastic resins in the Americas, based on the annual production capacity of the Company's twenty-nine plants in Brazil, six plants in the U.S., two plants in Germany, and four plants in Mexico, as of December 31, 2019. The Company's segments include, among others, its Vinyls Unit, which involved salt mining operations in Alagoas, Brazil.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Braskem's salt mining operations were unsafe and presented a significant danger to surrounding areas, including nearly two thousand properties; (ii) the foregoing foreseeably increased the risk that Braskem would be subjected to remedial liabilities, including, but not limited to, increased governmental and/or regulatory oversight or enforcement, significant monetary and reputational damage, and/or the permanent closure of one or more of its salt mining operations; (iii) accordingly, earnings generated from Braskem's salt mining operations were unsustainable; (iv) Braskem downplayed the true scope and severity of the Company's liability with respect to its salt mining operations; and (v) as a result, the Company's public statements were materially false and misleading at all relevant times.
On April 2, 2019, media sources and, later, Braskem, disclosed that the Company had been sued by local authorities in connection with a geological event it had purportedly caused in the state of Alagoas, Brazil. Specifically, Braskem disclosed, in relevant part, that the Company "ha[d] become aware, through the media, of a lawsuit filed against it by the Public Prosecutor's Office and the Public Defender's Office, both of the State of Alagoas." The Company disclosed that the lawsuits were "requesting the freezing of amounts and assets in a total of approximately R$6.7 billion [i.e., 6.7 billion reais] to guarantee any potential damages owed to the general public affected by the geological phenomenon which occurred in districts near the rock salt extraction area in Maceió."
On this news, Braskem's American Depositary Share ("ADS") price fell $1.60 per share over two trading days, or 5.98%, to close at $25.14 per share on April 3, 2020.
Then, on January 3, 2020, Braskem disclosed that it had executed an agreement related to the aforementioned geological event that subjected the Company to further liabilities. Specifically, the Company disclosed that on January 3, 2020, it had executed an agreement with the Alagoas State Public Defender's Office ("DPE"), the Federal Prosecution Office ("MPF"), the Alagoas State Prosecution Office ("MPE"), and the Federal Public Defender's Office ("DPU") "to support the relocation and indemnification of residents of the areas at risk located in the districts of Mutange, Bom Parto, Pinheiro and Bebedouro of Maceió, Alagoas, as established in the agreement, which will be submitted to judicial ratification." Among other conditions, the Company advised that preliminarily estimates for the relocation established in the agreement involve approximately 17,000 people, with estimates to be recognized as provisions at approximately R$1.7 billion for the implementation of the relocation, and R$1 billion to close the Company's salt wells.
Finally, on July 9, 2020, during pre-market hours, Braskem disclosed that authorities in northeastern Brazil had advised the Company that the geological damage from its salt mining operations was more widespread than initial estimates. Specifically, among other things, 1,918 properties needed to be evacuated because of the geological event associated with Braskem's mining operations, and Braskem estimated that moving the residents would cost the Company an additional R$850 million in possible payments to those residents, with another additional R$750 million in expenses to "definitively" shut down Braskem's salt mining operations.
On this news, Braskem's ADS price fell $0.59 per share, or 6.20%, to close at $8.93 per share on July 9, 2020.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
Robert S. Willoughby
SOURCE Pomerantz LLP