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Case Status:    DISMISSED    
On or around 07/02/2012 (Date of order of final judgment)

Filing Date: November 25, 2011

According to a press release dated November 25, 2011, the Complaint alleges that two Defendant company and an Individual Defendant entered into an October 6, 2008, agreement to purchase nine vessels from the Individual Defendant private fleet, with reckless disregard for the interests of Defendant Company’s and its shareholders, and with a primary goal of allowing Defendants, the Individual Defendant and another insider, to secure 3.5 million shares of the Defendant Company at prices between S20 and S30 per share.

On October 8, 2008, in a press release, the Defendant Company announced that in addition to purchasing nine carriers, it was also entering the offshore drilling segment. The Individual Defendant boasted that the Defendant Company was entering an industry that has "solid prospects for the next three to five years."

This venture was marked by procurement of two UDW vessels. A 100% wholly owned subsidiary of the Defendant Company, has entered into an agreement to take over equity interests of a holding company which owns two advanced capability UDW drill ships, which are controlled by clients of inside parties including the . In consideration for the drill ships, the sellers, including the Individual Defendant, received 25% of all the then issued and outstanding shares of another Subsidary Company.

In the press release, the Individual Defendant stated that the Defendant Company intends to spin off the Subsidiary Company to its shareholders in the form of a share dividend. Further, he misleadingly promised that the Defendant Company intended to file the necessary documents with the SEC within "the next few weeks and to complete the spin off either during the 4`" quarter of 2008 or the 1st quarter of 2009 subject to SEC review." However in order to complete the spin-off process, the Defendant Company needed to secure charters and financing to cover the $1.0 billion in shipyard payments. Due to lack of financing and charters, it was not feasible for the Defendant Company to complete the spin-off. Moreover, all throughout the 4th quarter of 2008, and 2009 and 2010, the Individual Defendant and then the insider continued to feed the Defendant Company shareholders with empty promises of spin-off. Another individual defendant has indicated during October 27, 2009, Third Quarter Earnings Conference Call, the Defendant Company was in fact considering the IPO option.

The complaint alleges that it was entirely foreseeable to the defendants that concealing from investors (i) the Company’s deteriorating financial condition, (ii) the Company’s intent to raise equity, (iii) the circumstances surrounding the spin-off and/or IPO, including the Company’s ability to secure charters and financing, would artificially inflate the price of the Company’s common stock. Plaintiffs claim that it was similarly foreseeable that the ultimate disclosure of this information and, in particular, the truth about the Company’s ability to comply with its loan covenants and drill ships IPO, would cause the price of the Company’s securities to drop significantly as the inflation caused by their earlier misstatements was removed from stock.

On December 16, 2011, Plaintiff filed an amended complaint.

On May 22, 2012, Plaintiffs filed a second amended complaint.

On June 25, 2012, Plaintiffs filed a notice of voluntary dismissal without prejudice. On July 2, 2012, the Court entered an Order of Dismissal.


Sector: Transportation
Industry: Water Transportation
Headquarters: Greece


Ticker Symbol: DRYS
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: E.D. Missouri
DOCKET #: 11-CV-02056
DATE FILED: 11/25/2011
CLASS PERIOD END: 12/31/2010
  1. Lutovich Law, LLC
    P.O. Box 410783, Lutovich Law, LLC, OH 63141
    314-898-3054 314-880-7755 ·
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