According to the law firm press release, Hi-Crush is a publicly traded Delaware limited partnership that produces monocrystalline “frac” sand, a specialized mineral that is used as a proppant to enhance the recovery rates of hydrocarbons from oil and natural gas wells.
The complaint alleges that the Registration Statement issued in connection with the Company’s August 16, 2012 IPO was negligently prepared and, as a result, contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading and was not prepared in accordance with the rules and regulations governing its preparation.
Specifically, the complaint alleges that the Registration Statement highlighted Baker Hughes Incorporated (“Baker Hughes”) as one of Hi-Crush’s two largest customers and emphasized that it was obligated to purchase sand from Hi-Crush pursuant to a May 2012 “take-or-pay contract” that “require[d]” Baker Hughes “to pay a specified price for a specified volume of frac sand each month.” According to the complaint though, on November 13, 2012, Hi-Crush was forced to disclose that Baker Hughes had unilaterally repudiated that supply contract, stating Hi-Crush was in breach. On this disclosure, Hi-Crush’s stock price fell $5 per share, or 25%, on extremely high trading volume of more than 3.3 million shares trading.
The complaint alleges that the Registration Statement issued in connection with the IPO was false and misleading and/or failed to disclose the following adverse facts: (a) after executing the original supply contract with Hi-Crush in October 2011, beginning in February 2012, Baker Hughes began expressing an unwillingness to comply with that contract; (b) six months prior to the IPO, Baker Hughes had demanded significant volume and other concessions resulting in the execution of an amended supply contract; (c) according to Baker Hughes, Hi-Crush had, or was, violating confidentiality provisions in the supply contract; and (d) as a result, Baker Hughes would repudiate all of its financial obligations under the supply contract, materially decreasing Hi-Crush’s revenues and profits attributable to that important supply contract.
On February 11, 2013, the Court issued an order of consolidating the cases 12 Civ. 9212 and 12 Civ. 8557. The Order also appointed lead plaintiff and lead counsel in this case.
On February 15, 2013, the lead plaintiffs filed an Amended Consolidated Class Action Complaint for Violations of the Federal Securities Laws.
On September 12, 2014, the Parties entered into a Stipulation of Settlement. This Settlement was preliminarily approved by the Court 4 days later. On January 5, 2015, a Final Approval Order was entered by the Court approving the Settlement and dismissing this case. An award of attorneys' fees and expenses was also made.