According to the law firm press release, A123 Systems, Inc. ("A123") designed, developed, manufactured, and sold advanced rechargeable lithium-ion batteries and battery systems. Its largest customer was Fisker Automotive, Inc. (“Fisker”), which, like A123, received hundreds of millions of dollars in U.S. Department of Energy (“DOE”) funding to design and mass produce plug-in electric vehicles.
The Complaint alleges that during the Class Period, Defendants issued materially false and misleading statements regarding the Company’s financial performance and future prospects, including failing to disclose that: (i) by February 2011, Fisker was in default on production milestones in its DOE funding agreement, threatening Fisker’s DOE funding and ability to pay A123; (ii) by June 2011, the DOE had cut off disbursements to Fisker; (iii) by the fall of 2011, Fisker had run out of cash and was refusing to accepting batteries from A123; (iv) A123’s $20.5 million investment in Fisker’s preferred stock was materially impaired; (v) the carrying value of A123’s long-term grant receivable was overstated; (vi) the carrying value of accounts receivable due A123 from Fisker was overstated; and (vii) as a result, A123 was not on track to achieve the financial results the market had been led to expect during the Class Period.
As the market learned between November 2011 and October 16, 2012 that Fisker was rejecting prior orders for batteries, that A123 was downgrading earnings guidance and taking an impairment charge on its Fisker investment, that the Company’s forecast of incurring significant net losses and negative operating cash flows had raised substantial doubt regarding the Company’s ability to continue as a going concern, and finally that A123 had filed for bankruptcy, the price of its stock declined from a Class Period high of $9.48 per share on February 28, 2011 to pennies per share.
On January 10, 2014, the Court issued an Order appointing lead Plaintiff and approving lead Counsel. Lead Plaintiff filed an amended Complaint on March 27.
On September 8, 2015, the Court issued an Order dismissing this case.
