EnergySolutions, Inc. Long Term Investors File Lawsuit Against Certain Directors

If you are a current long term investor in EnergySolutions, Inc. (NYSE:ES), including those who purchased ES shares prior to July 2008 and presently continue to hold those ES share, and / or have any information relating to the investigation, you have certain options and should contact the Shareholders Foundation, Inc.

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Company Name(s): 
EnergySolutions
Case Name: 
EnergySolutions Derivative Action 10/14/2010
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: ES
Lawsuit Overview
Type of Lawsuit: 
Shareholder Derivative Action
Date Filed: 
10/14/2010
Summary: 

An investor in EnergySolutions, Inc. (NYSE:ES) filed a lawsuit in State Court against certain current and former members of the EnergySolutions board of directors over alleged breaches of fiduciary duties, unjust enrichment, and other violations of law.

According to the complaint the plaintiff alleges that the directors breached their fiduciary duties and sold $764 million of EnergySolutions shares at prices they inflated by withholding information about its prospects. The plaintiff claims that EnergySolutions, Inc. in July 08, nearly nine months aft the initial public offering, conducted a secondary offering in which the defendants based on their knowledge of material non-public information regarding the business opportunities and financial status of EnergySolutions, sold a total of 40.25million shares of EnergySolutions common stock for gross proceeds of $764million. According to the plaintiff the defendants filed the registration statement with the U.S. Securities and Exchange Commission without disclosing the true nature of the EnergySolutions existing business relationships and business opportunities, many of which did not really exist. The registration statement ,among other things, described certain contract agreements between EnergySolutions and a number of the operating nuclear reactors in the United States, as well as potential decommissioning and decontamination project for shut-down reactors, such as EnergySolutions $870million decommissioning project at two nuclear facilities in Zion, Illinois. The plaintiff alleges that defendants, among other things, knew undisclosed material non-public information that was contrary to their depiction of EnergySolutions business opportunities, such as that the defendants knew that not a single facility, not even the ones in Zion, which would not have been able to begin decommissioning until late 2010, at the earliest – was a near term revenue opportunity for EnergySolutions at the time of the secondary public offering.
The lawsuit by current long term investors follows an earlier lawsuit on behalf of investors of EnergySolutions, Inc (NYSE: ES), who purchased their EnergySolutions, Inc (NYSE: ES) shares between November 14, 2007and October 14, 2008, including purchasers in or traceable to the Company's initial public offering on or about November 14, 2007 and the Company's offering on or about July 24, 2008 against EnergySolutions over alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.
Then on October 14, 2008, EnergySolutions issued a press release and announced, among other things, that EnergySolutions was reducing its estimates for net income, that the financial crisis would delay EnergySolutions’ ability to accelerate the decommissioning of nuclear power plant assets, and that the NRC denied the Petition for rulemaking change. Following this announcement, the price of EnergySolutions’ stock collapsed from $10.14 per share on October 13, 2008 to close at $5.64 per share on October 14, 2008 – a one day decline of $4.50 per share or 44% – on extremely heavy volume of 9.4 million shares. ES shares recently traded at $4.76 per share.