Shares of Toronto-based Timminco (TSX: T.TIM, Stock Forum) tumbled 20% to $1.24 Friday, following news of a class-action lawsuit involving the company.
On Thursday, Kim Orr Barristers P.C. released a statement, saying that it has filed a $520 million class action lawsuit on behalf of Timminco investors, naming the company and certain of its officers and directors as defendants.
“The Statement of Claim in the class action alleges that the defendants
knew or ought to have known that the representations regarding the company's ability to produce low-cost, high-quality silicone in commercial quantities were false or misleading,” alleges the news release.
The class action is being brought on behalf of all investors who acquired Timminco's shares between March 17, 2008 up to and including November 11, 2008.
“Beginning in early 2008, Timminco and Schimmelbusch made continuous
representations in the company's public disclosure regarding its ability to convert metallurgical-grade silicon into solar-grade silicon in a cost-efficient manner for sale to the solar industry,” says the law firm’s news release.
The law firm noted that following criticism, Timminco released a report by Photon Consulting in May 2008 that made positive statements about the company and its growth and profit potential.
“In August 2008, Timminco admitted that its solar-grade silicon production process was flawed. The Photon Report was subsequently withdrawn by Timminco,” says the news release.
Photon Consulting LLC is also named as a defendant in the class action.
On Friday, Timminco announced that it is aware of the news release from Kim Orr Barristers P.C. but said it has not been served with or received any court documents.
Timminco shares have fallen 95% over the last 200 days.
On the company’s Bullboard, Bearpaws1 said: “Been following these guys, seems like a lose lose situation[sic]”
