According to the law firm press release, Top Ships is an international owner and operator of tanker vessels focusing on the transportation of crude oil, petroleum products and bulk liquid chemicals.
The complaint alleges that through his control of Top Ships, the Company’s CEO caused Top Ships to engage in a series of manipulative share issuance/sales transactions with Kalani through which Top Ships would sell its common shares and securities convertible into common shares to Kalani at a significant discount to market price and file registration statements so that Kalani could resell these shares into the market. When Kalani’s sales of Top Ships stock caused the price of Top Ships stock to decline, the Company would reverse split the stock, causing a certain number of outstanding shares to be merged into a single share, and thereby raise the price of Top Ships stock. Then, Top Ships would again sell securities to Kalani and the same pattern of transactions would ensue. At the same time that Top Ships was engaging in these transactions, defendants failed to disclose the true purpose of the transactions and related stock issuances and reverses – to finance related-party transactions and acquisitions that primarily benefited Pistiolis and his related companies, and otherwise funnel money to Company insiders.
By August 2017, Top Ships, through Kalani, had issued and sold into the market tens of millions of shares of its common stock, vastly diluting the Company’s existing shareholders. While Top Ships has used the proceeds from these offerings to further enrich Pistiolis and his affiliates through various related-party transactions, the value of Top Ships common stock has plummeted by more than 99%.
On July 20, 2018, the Court issued an Order appointing Lead Plaintiffs and Counsel and consolidating cases. Lead Plaintiffs filed a consolidated amended Complaint on September 18. Defendants filed a Motion to Dismiss the consolidated amended Complaint on March 25, 2019. On August 7, the Court issued an Order granting Defendants' Motion to Dismiss. Lead Plaintiffs filed a Notice appealing the Court's Dismissal Order on August 26.