New Source Energy Partners L.P. 11% Series A Cumulative Convertible Preferred Units (NSLP-PA) Investor Securities Class Action Lawsuit 11/30/2015

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Company Name(s): 
New Source Energy Partners
Case Name: 
New Source Energy Partners Preferred Unitholder Class Action Lawsuit 11/30/2015
Case Status: 
Settlement Proposed
Affected Securities
OTCMKTS: NSLP
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
11/30/2015
Deadline To File for Lead: 
01/25/2016
Settlement Amount: 
$2,850,000
Deadline to Participate in Settlement: 
10/10/2017
Summary: 

The settlement includes all persons who or which purchased 11% Series A Cumulative Convertible Preferred Units (“Series A Preferred Units” or “Units”) of New Source Energy Partners L.P. pursuant and/or traceable to its May 5, 2015 offering of the Units prior to the commencement of this Action on October 21, 2015.

June 19, 2017 - Parties filed a stipulation of settlement.

March 9, 2017 - Defendants filed a motion to dismiss.

January 19, 2017 - The lead plaintiffs filed a second amended complaint.

December 19, 2016 - The court grants defendants' motion to dismiss with leave to amend.

August 19, 2016 - Defendants filed a motion to dismiss.

June 20, 2016 - The lead plaintiffs filed an amended complaint.

March 29, 2016 - Lead plaintiffs and lead counsel were appointed.

January 25, 2016 - Lead plaintiff motions were filed.

November 30, 2015 - An investor, who purchased units of New Source Energy Partners L.P. 11% Series A Cumulative Convertible Preferred Units (NSLP-PA), filed a lawsuit in the U.S. District Court for the Southern District of New York against New Source Energy Partners L.P., the underwriters of the New Source Energy Partners L.P. 11% Series A Cumulative Convertible Preferred Units issued pursuant to the Offering Documents, and certain Individual Defendants over alleged securities laws violations.

According to the complaint the plaintiff alleges on behalf of investors who purchased New Source Energy Partners L.P. 11% Series A Cumulative Convertible Preferred Units (NYSE: NSLP-PA) pursuant and/or traceable to Registration Statements, Prospectuses, and Prospectus Supplements filed with the Securities and Exchange Commission, that the defendants violated the Sections 11, 12(2), and 15 of the Securities Act of 1933 by making misleading statements and omissions in the Offering Documents.

On May 5, 2015, New Source Energy Partners L.P initially priced 1.76 million units of the 11% Series A Cumulative Convertible Preferred Units at $25.00 per unit through underwriters Stifel, Nicolaus & Company, Robert W. Baird & Co., Janney Montgomery Scott, Oppenheimer & Co. and Wunderlich Securities.

On September 28, 2015, prior to the commencement of trading, New Source Energy Partners L.P. announced that due to a pending borrowing base deficiency under its revolving credit facility, it would be prevented from paying the quarterly cash distribution on its 11% Series A Cumulative Convertible Preferred units.

The plaintiff claims that as a result of this disclosure, the price of the publicly traded New Source Energy Partners L.P. 11% Series A Cumulative Convertible Preferred Units closed at $2.18, down $3.62 on the day.