Rentech, Inc. Hit by Shareholder Lawsuit

SEPTEMBER 2011 - $1,800,000 Rentech settlement approved.

MARCH 2011 - According to the Notice:

Security and Time Period: Rentech, Inc. (“Rentech”) common stock (stock symbol: RTK) purchased or acquired between May 9, 2008, and December 14, 2009, inclusive (the “Class Period”), and held until after December 14, 2009.

Settlement Fund: $1,800,000 in cash. Your recovery will depend on the number of shares of Rentech common stock you, and other Class Members who file claims, purchased and sold and the prices at which you, and the other Class Members who file claims, purchased and sold those shares. The estimated average recovery per share of common stock will be approximately $0.016 per share before deduction of Court-approved fees and expenses and costs of notice and claims administration.

Reasons for Settlement: The case has been litigated since December 2009. The Lead Plaintiff and Lead Counsel believe that the Settlement provides the Class with a benefit now, instead of years of further uncertain litigation, including disposition of summary judgment motions, a contested trial and likely appeals, with the possibility of no recovery at all.

The Plaintiff alleges that Rentech’s stock price was artificially inflated as a result of a series of untrue or materially misleading statements concerning Rentech’s classification of cash deposits required by forward gas purchase contracts as inventory. Plaintiff further contends that Defendants made these statements knowing them to be false or misleading, or recklessly disregarding their false or misleading natures, and that investors suffered injury as a result of the alleged inflation.
The Defendants have denied and continue to deny each and all of the allegations made and claims brought by Lead Plaintiff, maintain that they have meritorious defenses and contend that many of the factual allegations are materially inaccurate. Defendants also have denied and continue to deny, inter alia, the allegations that Lead Plaintiff or the Class have suffered damages, that the prices of Rentech common stock were artificially inflated by reason of alleged misrepresentations, non-disclosures, or otherwise, or that Lead Plaintiff or the Class were harmed by the conduct alleged in the Complaint or otherwise.

Nonetheless, Defendants have concluded that further conduct of the Litigation would be protracted and expensive, and that it is desirable that the Litigation be fully and finally settled in the manner and upon the terms and conditions set forth in the Stipulation. Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases like this Litigation. The Settlement shall in no event be construed as, or deemed to be evidence of, an admission or concession by any of Defendants with respect to any claim of any fault or liability or wrongdoing or damage to the Class Members in this Litigation.

If the Case Had Not Settled: The Settlement must be compared to the risk of no recovery after contested dispositive motions, trial and likely appeals. A trial is a risky proposition. The claims in the Litigation involve numerous complex legal and factual issues, many of which would require expert testimony. The Settling Parties disagree on both liability and damages and do not agree on the average amount of damages per share, if any, that would be recoverable if Plaintiffs were to have prevailed on each claim alleged. Among the many key issues about which Lead Plaintiff and the Defendants do not agree are: (1) whether the Defendants violated the securities laws or otherwise engaged in any wrongdoing; (2) whether the misrepresentations and omissions alleged by the Lead Plaintiff were material, false, misleading or otherwise actionable under the securities laws; (3) the extent (if any) that the alleged misrepresentations and omissions influenced the trading prices of Rentech common stock during the relevant period; and (4) the method for determining whether, and the extent to which, purchasers of Rentech stock suffered injury and damages that could be recovered at trial.

DECEMBER 2009 - An investor in Rentech, Inc. (Public, AMEX:RTK) filed a lawsuit in the United States District Court for the Central District of California on behalf of purchasers of Rentech, Inc. (AMEX:RTK) securities during the period between February 8, 2008 and December 15, 2009, against Rentech and others over alleged violations of Federal Securities Laws.

According to the complaint the plaintiff alleges that Rentech, Inc. and certain of its officers and directors violated the Securities Exchange Act of 1934 by issuing between February 8, 2008 and December 15, 2009 false and/or misleading statements, and failing to disclose material adverse facts about its business, operations, and prospects. Then on December 14, 2009, Rentech, Inc announced that it would restate its previously reported annual and quarterly results for fiscal year 2008 and for the first three quarters of fiscal year 2009, to correct “a prior incorrect classification of cash deposits required by forward gas purchase contracts as inventory, and reclassifies them as deposits on gas purchase contracts within current assets on the balance sheet.” The plaintiff alleges that as a result of this news, Rentech, Inc stock (RTK) fell approximately 11% on unusually heavy trading volume from its December 14, 2009, closing price of $1.64 per share, to close on December 16, 2009, at $1.47 per share and the price of Rentech stock (RTK) has declined more than 22% since the disclosure of its improper accounting practices.

Rentech, Inc., located in Los Angeles, California, is focused on providing clean energy solutions. The Company is focusing on the deployment of the Rentech Process and the Rentech-SilvaGas biomass gasification technology (Rentech-SilvaGas Technology) through both licensing of its technology and development of facilities to produce synthetic fuels and chemicals, natural gas substitutes, and electric power from renewable and fossil feed stocks.

Rentech reported on September 30, 2008 for the past 12 months Total Revenue of $210.97million and on September 30, 2009 for the past 12 months Total Revenue of $183million with a Net Income of $3.03million. Shares of Rentech (RTK) traded recently at $1.30 per share, down from its 52weekHigh of $2.93 per share, $3.88 per share in 2007, and over $5 per share in 2006