According to a press release dated November 6, 2008, on June 17, 2008, Britannia Bulk accomplished its IPO of 8.3 million shares at $15.00 per share for net proceeds of $116.2 million, pursuant to the Registration Statement. In its first day of trading, Britannia Bulk stock closed at $13.85 per share. Then, on October 28, 2008, Britannia Bulk issued a press release announcing that the Company expected a significant net loss for the third quarter of 2008 compared to the net income achieved during the second quarter of 2008. The loss was due to problems with hedges the Company had entered into earlier in the year. In addition, the Company announced it would not pay a dividend on its common shares for the quarter ended September 30, 2008, or for the foreseeable future.
Following this disclosure, the Company’s stock collapsed to $0.16 per share. The following day, the Company disclosed that it had been notified by its lenders that they were accelerating all of its subsidiary’s obligations under a $170 million lending facility. This would ultimately result in the subsidiary being placed into administration under U.K. insolvency laws.
According to the complaint, the Registration Statement failed to disclose the problems in the Company’s activities in the forward freight agreements (FFAs) market. Specifically, the Registration Statement concealed that the Company failed to institute and enforce controls that would prevent Company personnel from buying FFAs not purchased to hedge identifiable ship or cargo positions. FFAs were represented to only be used as a hedge for work Britannia Bulk’s ships engaged in. However, in fact, FFAs were used outside of these guidelines, exposing the Company to significant risks. Moreover, the Company had not entered into appropriate fixed price contracts given the dramatic fluctuation in crude oil and bunker fuels.
On February 18, 2009 the court ordered related cases to be consolidated and appointed lead plaintiff and lead counsel. A Consolidated Complaint is to be filed by April 17, 2009.
On October 19, 2009, an opinion and order were entered regarding the Defendants' June 12, 2009 motions to dismiss the Complaint were granted except for the
Section 15 claims against two of the individual defendants. It was also thereby ordered that the Plaintiff shall show cause in writing by November 20, 2009, why his remaining Section 11 claim against Britannia and Section 15 claims against two of the individual defendants should not be voluntarily dismissed.
On November 20, 2009, a Notice Of Voluntary Dismissal Pursuant to Rule 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure was filed with the court.
On December 17, 2009, an order by the Court that the Clerk shall close this case as well as all cases with which it has been consolidated.
On February 09, 2010, the plaintiffs motion to reopen the case was denied.