A class action has been filed in the United States District Court for the District of Kansas on behalf of purchasers of YRC Worldwide Inc. (NASDAQ: YRCW) securities between April 24, 2008 and November 2, 2009, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”). The complaint charges YRC and certain of its officers and directors with violations of the Exchange Act. YRC provides various transportation services worldwide. The Company’s National Transportation unit offers a range of services for the transportation of industrial, commercial, and retail goods, serving manufacturing, wholesale, retail, and government customers.
The complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company’s true financial condition, business and prospects. Specifically, the complaint alleges that defendants’ statements were materially false and misleading because they misrepresented and overstated the financial condition of the Company and had the intended effect of causing YRC shares to trade at artificially inflated levels throughout the Class Period – reaching a Class Period high of over $20 per share during August 2008.
On October 29, 2008, YRC issued a press release announcing that it had eliminated 3,750 jobs at the Company’s various units, representing roughly 6% of YRC’s total work force of 58,000. That same day, Reuters reported that the jobs elimination action was part of the Company’s “ongoing efforts to revamp operations.” Throughout the balance of the Class Period, the complaint alleges that YRC continued to deceive the investing public by making positive financial announcements about the Company until November 2, 2009, when YRC shocked investors when it revealed, for the first time, that the Company was performing well below expectations and that it now expected to convert over half a billion dollars of debt into shares of Company stock, thereby effectively giving bondholders as much as 95% of the equity of the Company and resulting in the resignation of seven of its nine directors. Shares of YRC stock plummeted on this news—falling 64% on a single trading day, or over $2.30 per share on huge volume of 54.8 million shares traded, over five times the stock’s average daily volume over the past three months, to close at only $1.32 per share on November 2, 2009.
If you are a current shareholder and purchased during the period April 24, 2008 and November 2, 2009, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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