According to a law firm's press release, the complaint alleges on January 15, 2015, Southwestern conducted the Offering, selling 30 million depositary shares at a price of $50 per share, and gaining net proceeds of $1.672 billion. Southwestern's Registration Statement, filed with the U.S. Securities and Exchange Commission in support of the Offering, stated that the company's long-term outlook for the business is favorable and that its resource base, financial strength, and disciplined capital would provide the company with an opportunity to grow through new exploration and development activities. However, the complaint alleges that the Registration Statement Southwestern issued contained misleading statements and omitted material information. Specifically, the company failed to disclose that it was experiencing severe liquidity and debt issues that threatened its ability to continue its drilling activities.
Approximately one year after the Offering, on January 21, 2016, Southwestern revealed in a letter to the Texas Workforce Commission that it would lay off 376 employees at its Spring, Texas office, a strategy that was part of the company's larger workforce reduction plan to cut 1,100 positions. Then, on February 25, 2016, the company reiterated its "decision to temporarily halt its drilling activities." On June 9, 2016, Southwestern announced that it sold 55,000 net acres of land in West Virginia for $450 million due to its looming debt obligations. Southwestern's depositary shares (SWNC) have plummeted nearly 53% since the Offering, closing at $23.54 per share on November 1, 2016.