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id: 786, Created by Stan Vick, Scout
Bausch (BHC) B+L Spin Off Misleading Case
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D. New JerseyCourt
06 Aug 2020Class period Start
05 Mar 2023Class period End
- 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.
Failure to Disclose,
Shock Event Date
04 May 2023
26 July 2023
Lead Plaintiff Deadline
25 September 2023