Robbins Arroyo LLP: StoneMor Partners L.P. (STON) Misled Shareholders According to a Recently Filed Class Action
December 16 2016 - 5:26PM
Business Wire
Shareholder rights law firm Robbins Arroyo LLP announces that a
class action complaint was filed against StoneMor Partners L.P.
(NYSE: STON) in the U.S. District Court for the Eastern District of
Pennsylvania. The complaint is brought on behalf of all purchasers
of StoneMor securities between January 19, 2012 and October 27,
2016, for alleged violations of the Securities Exchange Act of 1934
by StoneMor's officers and directors. StoneMor, together with its
subsidiaries, owns and operates cemeteries in the United
States.
View this information on the law firm's Shareholder Rights
Blog:www.robbinsarroyo.com/shareholders-rights-blog/stonemor-partners-l-p
StoneMor Accused of Misrepresenting Its Financial
Condition
According to the complaint, StoneMor officials emphasized the
company's financial metrics based on non-Generally Accepted
Accounting Principles ("GAAP") measures to make the company appear
more profitable than it actually was. Further, StoneMor's senior
management allegedly expressed contempt for GAAP in order to create
an illusion of financial stability. For example, GAAP operating
income for 2015 measured at only $1.3 million, while the company
claimed "adjusted" operating income of a whopping $67.8 million. In
addition, the complaint alleges that StoneMor has never generated
sufficient cash flow from operations to make the company's
distributions. Further, StoneMor's scheme to mislead the public
about its true financial condition allegedly stemmed from the
company's Limited Partnership Agreement with its general partner,
StoneMor GP, LLC, pursuant to which StoneMor GP receives additional
distributions when the company issues distributions above a
predetermined threshold.
On October 27, 2016, StoneMor issued a press release announcing
a quarterly cash distribution of $0.33 per common unit for the
third quarter of 2016—a 50% reduction over the previous quarter.
The company cited its new sales force, stating that it was working
to increase its quality in size. On November 9, 2016, the company
released disappointing operating and financial results, revealing
that it was experiencing slower than expected progress in
recruitment. StoneMor further noted that it had to record
additional adjustments to its consolidated financial statements and
disclosed that there were material weaknesses in the company's
internal control over financial reporting as of December 31, 2015.
Since the company's distribution cut in October, its stock declined
sharply by 67%, closing at $7.83 per share on December 15,
2016.
StoneMor Shareholders Have Legal Options
Concerned shareholders who would like more information about
their rights and potential remedies can contact attorney Darnell R.
Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the
shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in
shareholder rights law. The firm represents individual and
institutional investors in shareholder derivative and securities
class action lawsuits, and has helped its clients realize more than
$1 billion of value for themselves and the companies in which they
have invested.
Attorney Advertising. Past results do not guarantee a similar
outcome.
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version on businesswire.com: http://www.businesswire.com/news/home/20161216005817/en/
Robbins Arroyo LLPDarnell R. Donahue(619) 525-3990 or Toll Free
(800) 350-6003DDonahue@robbinsarroyo.comwww.robbinsarroyo.com
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