According to a law firm press release, SFX is engaged in the production and promotion of live music festivals and events, production of music tours, selling event tickets through a ticketing platform, merchandising and related services.
The complaint alleges that, throughout the Class Period, SFX and certain of its executive officers made a series of materially false and misleading statements in connection with a proposed acquisition of SFX by Defendant. For example, the complaint alleges that although Defendant repeatedly affirmed his commitment to acquire SFX, he and other SFX executive officers knew or recklessly disregarded, and failed to disclose to shareholders, that Defendant did not have the requisite financing in place at the time he made his proposal to acquire SFX, and knew or recklessly disregarded that Defendant would not be able to obtain the required financing to consummate the transaction.
The Complaint further alleges that, given the Company's growing debt and decreasing margins, it was not feasible that Defendant was ever going to buy the Company. Rather, Defendant initiated and maintained a sham process designed to lure third party buyout offers for SFX, all in an attempt to shed his personal SFX investment before the truth about the deterioration of the Company's finances could no longer be concealed.