Several law firms, including Pennsylvania-based Howard Smith, New York group Harwood Feffer and Rigrodsky and Long of Delaware, announced late Wednesday and Thursday that the documentation seeking remedies under the Securities Exchange Act of 1934 was filed in the US District Court for the Northern District of Alabama.
The class action group includes those who purchased stock between April 20 and September 21, 2011 and their complaint alleges that the defendant, Birmingham, Alabama-based Walter, was experiencing “squeeze” events in Alabama and lower coal transportation rates in Canada that significantly reduced its coal production.
Also, the class action suit claimed that the company's commitment to ship more than 700,000 tons of coal in the second quarter at first-quarter sales prices would result in a material adverse effect on Walter’s average sales prices and operating results during the second quarter last year.
The documentation went on to say Walter was experiencing a significant decline in its margins and profitability and the defendants lacked a reasonable basis for its positive statements about the company and its business prospects during the class period.
No class has yet been certified in the action, so no representation is currently in place unless retained.
As such, the group of firms invited impacted stockholders to move for lead plaintiff status by March 26.
One firm, Harwood Feffer, also confirmed that current shareholders of Walter Energy might also be eligible to file a claim.
Walter Energy has three business arms, including underground mining, surface mining and coke.
Its two largest operations are the underground metallurgical operations No. 7 and No. 4 in central Alabama.
