Bausch (BHC) B+L Spin Off Misleading Case

D. New Jersey

Court

3:23-cv-03996

Case number

06 Aug 2020

Class period Start

05 Mar 2023

Class period End

25 Sept 2023

Lead Plaintiff motion deadline

Bausch reported negative earnings results for Q1 2023, with a further delay in the B+L share distribution. 
 $BHC fell 20% and lost $0.5 billion of its market cap. 
Investors suspect  Bausch and its Leaders of misleading spinoff benefits.
On May 4, 2023, Bausch (BHC) announced negative earnings results for Q1 2023, which indicated further delay of the B+L share distribution. 

According to analysts, the probability of a distribution was now less than 50%, and without any mention of it from management, the likelihood of it occurring in the near term was low.

On this news, $BHC fell 20% and lost over $0.5 billion of its market capitalization.
Going back on August 6, 2020, Bausch announced plans to spin off B+L into its own publicly tradeable entity. BHC at the time said that the benefits of the spinoff included "improved strategic focus and enhanced financial transparency." 
Joseph Papa, Bausch's former CEO, described the spinoff as "unlocking what we see as unrecognized value in Bausch Health shares."
Taking all representations into account, Investors have reasons to suspect Bausch and its Leaders of misleading about, among other things:
the B+L spinoff would not result in two strong separate companies;
without B+L, Bausch was left overly leveraged and without the cashflow generated by B+L;
distribution of the B+L spinoff shares would not occur as represented;
the statements omitted and/or concealed the potential damages Bausch faced from the multiple hedge funds and institutional investors who “opted out” of the class action settlement in favor of pursuing individual claims ("Opt-Out Plaintiffs"); and 
the spinoff was not intended to benefit Bausch shareholders but instead designed to subvert the Opt-Out Plaintiffs’ lawsuit against the company. 
When the true details entered the market, the lawsuit claims that investors suffered damages.

Case Status

Motion to dismiss

Alleged Offence

Misleading Statements,

Financial Misrepresentation,

Failure to Disclose,

Omissions

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Shock Event Date

04 May 2023

Filing date

26 July 2023

Lead Plaintiff Deadline

25 September 2023

Bausch (BHC) B+L Spin Off Misleading Case

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