The original complaint charges TETRA and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company operates as an oil and gas services company worldwide. It manufactures integrated calcium chloride and brominated products, and supplies feedstocks to energy and other markets.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements and failed to disclose the following adverse facts which were known to defendants or recklessly disregarded by them: (i) that the Company’s Well Abandonment and Decommissioning (“WA&D”) division was not performing according to internal expectations; (ii) that the Company failed to timely take a charge for insurance receivables which remain uncollected; and (iii) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.
On August 3, 2007, the Company announced its financial results for the second quarter of 2007 and reduced its full year 2007 earnings guidance because of, among other things, poor profits at its WA&D services. Shares of TETRA stock fell 25% following this announcement. Then, on October 16, 2007, TETRA issued a press release announcing that it was withdrawing its previously estimated full year 2007 earnings guidance because of, among other things, the Company’s concern that it would have to take a charge to earnings for substantial uncollected insurance receivables. In response to this announcement, the price of TETRA common stock fell an additional $1.76 per share, or approximately 8%, to close at $19.86 per share, on heavy trading volume.
According to the Company’s FORM 10-Q For The Quarterly Period Ended September 30, 2009, between March 27, 2008 and April 30, 2008, two putative class action complaints were filed in the United States District Court for the Southern District of Texas (Houston Division) against us and certain of our officers by certain stockholders on behalf of themselves and other stockholders who purchased our common stock between January 3, 2007 and October 16, 2007. The complaints assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The complaints allege that the defendants violated the federal securities laws during the period by, among other things, disseminating false and misleading statements and/or concealing material facts concerning our current and prospective business and financial results. The complaints also allege that, as a result of these actions, our stock price was artificially inflated during the class period, which enabled our insiders to sell their personally-held shares for a substantial gain. The complaints seek unspecified compensatory damages, costs, and expenses. On May 8, 2008, the Court consolidated these complaints as In re TETRA Technologies, Inc. Securities Litigation, No. 4:08-cv-0965 (S.D. Tex.). On August 27, 2008, Lead Plaintiff Fulton County Employees’ Retirement System filed its Amended Consolidated Complaint. On October 28, 2008, we filed a motion to dismiss the federal class action. On July 9, 2009, the Court issued an opinion dismissing, without prejudice, most of the claims in this lawsuit but permitting plaintiffs to proceed on their allegations regarding disclosures pertaining to the collectability of certain insurance receivables.