|  | | 2009 News and Press Releases | | |
DISMISSAL NEWS:
Judge Won't Toss Superior Offshore Securities Suit
Jocelyn Allison
Securities Law 360. January 13, 2009
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EXCERPT: A federal judge has refused to dismiss a securities class action against officers and directors of Superior Offshore International Inc. and underwriters involved in the bankrupt company's April 2007 initial public offering. Judge Nancy F. Atlas of the U.S. District Court for the Southern District of Texas ruled Monday the plaintiffs had adequately pled their claims against the individual defendants and underwriters Merrill Lynch Pierce Fenner & Smith Inc. and J.P. Morgan Securities Inc. Before its collapse, Superior Offshore provided underwater construction and commercial diving services to the crude oil and natural gas industry in the Gulf of Mexico. Shareholders have accused the defendants of conducting the company's IPO with a false and misleading registration statement and prospectus. Litigation was stayed against the company after it filed for bankruptcy in April, but claims continue against former board chairman Louis Schaefer Jr., President and CEO James Mermis, Chief Financial Officer Roger Burks and General Counsel Joshua Koch Jr. Both the individual defendants and the underwriter defendants lost their bids Monday to dismiss the case. In her ruling, Judge Atlas noted that the plaintiffs' Section 11 claims under the securities laws did not require detailed pleading, and that they only needed to allege a material misrepresentation or omission on the registration statement to proceed with the case. The plaintiffs had alleged that the registration statement included a number of false statements or omissions, such as claiming that the company had good prospects for future hurricane-related repair work when in fact such work had declined at the time of the IPO, court documents said. |
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