According to the law firm press release, the Complaint alleges that during the Class Period, Invacare and certain of its senior executives violated provisions of the Exchange Act by issuing false and misleading press releases, financial statements, filings with the Securities and Exchange Commission (“SEC”), and statements during investor conference calls. According to the Complaint, Invacare and certain of its senior executives misled investors regarding Invacare’s noncompliance with Food and Drug Administration (“FDA”) guidelines and Current Good Manufacturing Practices (“CGMP”), and masked the fact that the Company suffered from widespread operational, quality, and regulatory deficiencies. Specifically, the Company concealed from investors that it received a series of warnings from the FDA—known as Forms 483—which identified serious compliance violations at its two major United States-based manufacturing facilities.
After repeatedly failing to remedy these violations, the Company received a Warning Letter from the FDA, which the FDA released to the public on January 4, 2011. The Warning Letter identified a litany of CGMP violations and “recurring” consumer complaints concerning the safety of Invacare’s medical beds, including incidents of death caused by entrapment and fire. In the Warning Letter, the FDA reprimanded Invacare for failing to take preventative action, document and evaluate serious complaints, and complete risk assessments to ensure the safety of its products. Disclosure of the Warning Letter caused Invacare stock to drop $1.38 per share, or 4.5 percent, to close at $29.29 per share.
Over the next several months, Defendants continued to downplay the scope and significance of Invacare’s compliance issues, despite its receipt of two additional Forms 483 in August 2011, which were also concealed from investors. On December 8, 2011, however, Invacare shocked investors by issuing a press release announcing that the FDA intended to enter a consent decree, which would require the suspension of certain operations until the Company’s manufacturing facilities became compliant with FDA regulations. News of Invacare’s systemic quality and regulatory deficiencies, which could take many months to remediate and impact Invacare’s revenue and growth, caused the Company stock to plummet $5.88 per share, or 28.6 percent, to close at $14.70 per share, wiping out over $180 million in market capitalization.
On November 13, 2007., the motion was granted appointing Lead Plaintiff for the Class and Bernstein Litowitz Berger & Grossmann LLP was appointed Lead Counsel.
On November 15, 2013, an Amended Class Action Complaint was filed by the plaintiffs against the defendants.
On June 2, 2015, the parties entered into a Stipulation of Settlement.