New York, New York--(Newsfile Corp. - May 20, 2024) - Bronstein, Gewirtz & Grossman, LLC, a nationally recognized law firm, notifies investors that a class action lawsuit has been filed against The Chemours Company ("Chemours" or "the Company") (NYSE: CC) and certain of its officers.
Class Definition:
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired Chemours securities between February 10, 2023 and February 28, 2024, inclusive (the "Class Period"). Such investors are encouraged to join this case by visiting the firm's site: bgandg.com/CC.
Case Details:
According to the Complaint, Chemours, headquartered in Wilmington, Delaware, is an industrial and specialty chemical company for a number of markets including the "coatings, plastics, refrigeration and air conditioning, transportation, semiconductor and consumer electronics, general industrial, and oil and gas" markets.
Prior to and during the Class Period, according to the Complaint, Chemours set and publicized certain criteria for executive compensation. For example, pursuant to Chemours's Annual Incentive Plans ("AIPs") for 2022 and 2023, the Company's senior executive officers (including the CEO and CFO) were entitled to additional cash compensation if certain targets, including Free Cash Flow targets, were met. Similarly, pursuant to Chemours's Long-Term Incentive Plans ("LTIPs"), the Company's senior executive officers (including the CEO and CFO) were entitled to stock compensation if certain targets, including Free Cash Flow Conversion (defined as cash flows from operations, less purchases of property, plant, and equipment divided by Adjusted EBITDA) targets, were met.
Notwithstanding Defendants' repeated assurances regarding the accuracy of the Company's financial reports and the adequacy of the Company's internal control over financial reporting, continues the Complaint, investors began to learn the truth on February 13, 2024, when Chemours "announced that it has postponed the release of its financial results and conference call related to the fourth quarter and full year ended December 31, 2023, which had previously been scheduled for February 14, 2024 and February 15, 2024, respectively," and that it now "expect[ed] to issue its fourth quarter and full year 2023 financial results after market close on Wednesday, February 28, 2024."
According to the Company, the delay was necessary "because it needs additional time to complete its year-end reporting process" and "is evaluating its internal control over financial reporting . . . with respect to maintaining effective controls related to information and communications." Chemours also revealed that it needed additional time for its Audit Committee to conduct a related internal review.
In response to this initial development, the price of Chemours common stock fell $3.85 per share, or more than 12%, from a close of $30.49 per share on February 13, 2024, to close at $26.64 per share on February 14, 2024.
Then, before the market opened on February 29, 2024, according to the Complaint, Chemours stunned investors when it announced that it was delaying the filing of its annual report for 2023 and that its Board of Directors (the "Board") had "place[d] President and Chief Executive Officer Mark Newman, Senior Vice President and Chief Financial Officer Jonathan Lock and Vice President, Controller and Principal Accounting Officer Camela Wisel on administrative leave . . . pending the completion of an internal review being overseen by the Audit Committee of the Board of Directors with the assistance of independent outside counsel."
According to the Company, the scope of the investigation "includes the processes for reviewing reports made to the Chemours Ethics Hotline" and Chemours's "practices for managing working capital, including the related impact on metrics within the Company's incentive plans [and] certain non-GAAP metrics" in the Company's financial reports. Given the importance of these issues-not only to executive compensation, but also investors' assessment of Chemours's financial performance-the Company acknowledged that it "is evaluating one or more potential material weaknesses in its internal control over financial reporting as of December 31, 2023 with respect to maintaining effective controls related to the control environment, including the effectiveness of the 'tone at the top' set by certain members of senior management."
In response to these revelations, the price of Chemours common stock plummeted $9.05 per share, or more than 31%, from a close of $28.72 per share on February 28, 2024, to close at $19.67 per share on February 29, 2024.
On March 6, 2024, after the end of the Class Period, Chemours announced that the Board's Audit Committee concluded "that the members of senior management who were placed on administrative leave last week engaged in efforts in the fourth quarter of 2023 to delay payments to certain vendors that were originally due to be paid in the fourth quarter of 2023 until the first quarter of 2024, and to accelerate the collection of receivables into the fourth quarter of 2023 that were originally not due to be received until the first quarter of 2024." Critically, "[t]he Audit Committee found that these individuals engaged in these efforts in part to meet free cash flow targets that the Company had communicated publicly, and which also would be part of a key metric for determining incentive compensation applicable to executive officers." According to the Company, "[t]he Audit Committee review also determined that similar actions, though to a lesser extent, were taken in the fourth quarter of 2022, resulting in a significant increase in these cash flow measures for the quarter ended December 31, 2022, and a decrease in these measures in the first quarter of 2023."
The Complaint alleges that throughout the Class Period Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts, about the Company's business and operations. Specifically, Defendants misrepresented and/or failed to disclose that:
(1) certain of the Company's senior executive officers manipulated Free Cash Flow targets as a means to maximize additional cash and stock incentive compensation applicable to executive officers pursuant to the Company's AIPs and LTIPs;
(2) the Company's accounting practices and procedures, including its internal control over financial reporting, were deficient; and
(3) as a result, Defendants' statements about the Company's business, operations, and prospects lacked a reasonable basis.
What's Next?
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm's site: bgandg.com/CC or you may contact Peretz Bronstein, Esq. or his Law Clerk and Client Relations Manager, Yael Nathanson of Bronstein, Gewirtz & Grossman, LLC at 332-239-2660. If you suffered a loss in Chemours you have until May 20, 2024, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as lead plaintiff.
There is No Cost to You
We represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys' fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman:
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide.
Attorney advertising. Prior results do not guarantee similar outcomes.
Contact:
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Nathanson
332-239-2660 | info@bgandg.com
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/202865
