Rentech Inc (NASDAQ: RTK) Investor Securities Class Action Lawsuit 02/22/2017
February 22, 2017 - An investor in shares of Rentech Inc (NASDAQ: RTK) filed a lawsuit in the U.S. District Court for the Eastern District of New York over alleged violations of Federal Securities Laws by Rentech Inc in connection with certain allegedly false and misleading statements made between November 9, 2016 and February 20, 2017.
Los Angelese, CA based Rentech Inc is a provider of wood fiber processing services, wood chips and wood pellets. Rentech Inc reported that its annual Total Revenue rose from $269.18 million in 2014 to $295.84 million while its Net Loss increased from $32.01 million in 2014 to $114.61 million in 2015.
On February 21, 2017, Rentech Inc announced that it would idle its Wawa facility due to equipment and operational issues that would require additional unbudgeted capital investments. Rentech Inc also cited “continued uncertainty” concerning the profitability of pellets produced at the facility and advised investors that it was exploring strategic alternatives for both the Wawa facility and Rentech Inc as a whole.
Shares of Rentech Inc (NASDAQ: RTK) declined from $2.78 per share in February 17, 2017 to as low as $1.12 per share on February 22, 2017.
According to the complaint the plaintiff alleges on behalf of purchasers of Rentech Inc (NASDAQ: RTK) common shares between November 9, 2016 and February 20, 2017, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between November 9, 2016 and February 20, 2017, the defendants made false and/or misleading statements and/or failed to disclose that Rentech Inc’s resources were not sufficient to overcome any operating challenges and remaining bottleneck at the Wawa facility, that consequently, the Wawa facility would not reach approximately 60% of production capacity within the next couple quarters and achieve full capacity in the range of 400,000 to 450,000 metric tons late in the year, and that as a result, defendants’ statements about Rentech Inc’s business, operations and prospects were materially false and misleading and/or lacked a reasonable bases at all relevant times.
On February 22, 2017, NASDAQ: RTK shares closed at $1.15 per share.