The complaint charges ICG and certain of its officers and directors and its underwriters with violations of the Securities Act of 1933. ICG is a coal producer with operations in West Virginia, Kentucky, Maryland and Illinois.
Specifically, the complaint alleges that in November and December 2005, ICG undertook two integrated stock transactions involving Registration Statements filed and effective with the SEC. The Offerings were mutually interdependent. The statements in the November and December 2005 Registration Statements concerning the Company’s business, the strength of its management team, its safety and maintenance practices, its ability to capitalize on favorable market conditions, its ability to deliver optimum selections of coal to meet increasing demand, and its acquisition of the Anker Coal Company and company reorganization were all false and misleading when made. In fact, the Company was suffering from serious shortfalls in its maintenance and safety procedures, its mines were ill-equipped, as were its miners, the Anker acquisition had been a mistake, saddling the Company with outmoded and dangerous mining operations, the Company’s top management team was distracted by work involved in the November 2005 reorganization and December 2005 offering and the Company would be unable to produce sufficient amounts of coal in desired mixes to meet its revenue and earnings and production forecasts. After the November and December 2005 Registration Statements became effective, information entered the marketplace in a series of company-specific negative revelations contradicting the prior representations made and demonstrating the falsity of the Registration Statements. As a result, the Company’s stock price declined sharply, damaging Class members who purchased the stock issued by the Company in the Offerings.
In a press release dated July 26, 2007, Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach Coughlin") today announced that the firm has been appointed Lead Counsel for the class of investors in the securities class action filed against International Coal Group, Inc. ("ICG") (NYSE:ICO) and certain of its officers and directors, which is pending in the U.S. District Court for the Southern District of West Virginia. The Court appointed the City of Ann Arbor Employees' Retirement System and AIP Alternative Strategies Funds-Alpha Hedged Strategies Fund as Co-Lead Plaintiffs.
According to the Company’s Form 10-Q for the quarterly period ended September 30, 2008, the amended complaint asserted claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 based on alleged false and misleading statements in the registration statements filed in connection with the Company’s November 2005 reorganization and December 2005 public offering of common stock. The Company and the named officers and directors filed a motion to dismiss the amended complaint on September 28, 2007, as did the underwriters, and, on September 30, 2008, the court dismissed the action in its entirety. The plaintiffs did not appeal the dismissal.