The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Middle District of North Carolina on behalf of those who acquired Avaya Holdings Corp. (“Avaya” or the “Company”) (NYSE: AVYA) securities between November 22, 2021 through November 29, 2022 (the “Class Period”). Investors have until March 6, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Avaya operates as a holding company and, through its subsidiaries, provides business collaboration and communications software solutions.
On July 28, 2022, Avaya announced the termination of its Chief Executive Officer James M. Chirico, Jr. The Company also announced preliminary Q3 2022 financial results that included expected revenues and adjusted EBITDA well below previously given guidance and an unquantified but “significant” impairment charge. In addition, Avaya withdrew its 2022 guidance. On this news, the price of Avaya shares declined by $1.19 per share, or approximately 57%, from $2.09 per share to close at $0.90 on July 29, 2022.
On August 9, 2022, Avaya announced that: (1) it determined there was substantial doubt about its ability to continue as a going concern; (2) it would not timely file its financial statements for the quarter ended June 30, 2022; (3) its Audit Committee commenced internal investigations into circumstances surrounding the Company’s financial results for the quarter; and (4) the Audit Committee also commenced an investigation into matters raised by a whistleblower. On this news, the price of Avaya shares declined by $0.51 per share, or approximately 45.53%, from $1.12 per share to close at $0.61 on August 9, 2022.
On November 30, 2022, Avaya disclosed in a Current Report filed on Form 8-K with the SEC that “control deficiencies  management had been reviewing represent material weaknesses in the Company’s internal control over financial reporting” and that “management’s assessment of ICFR included in Item 9A of the Company’s Annual Report on Form 10-K for its fiscal year 2021 ended September 30, 2021, filed with the [SEC] on November 22, 2021  should no longer be relied upon.” Specifically, the Form 8-K stated that the Company “did not design and maintain effective controls related to the information and communication component of the Committee of Sponsoring Organizations of the Treadway Commission framework,” “did not design and maintain effective controls to ensure appropriate communication between certain functions within the Company,” and “did not design and maintain effective controls over the ethics and compliance program.” On this news, the price of Avaya shares declined by $0.15 per share, or approximately 13.75%, from $1.12 per share to close at $0.97 on November 30, 2022.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose: (i) the Company's internal control over financial reporting ("ICFR") was deficient in several areas; (ii) as a result of these deficiencies, the Company had failed to design and maintain effective controls over its whistleblower policies and its ethics and compliance program; and (iii) the Company's deteriorating financial condition was likely to raise substantial doubt as to its ability to continue as a going concern.
If you purchased or otherwise acquired Avaya securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at firstname.lastname@example.org, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website: http://www.kmllp.com.
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Kirby McInerney LLP
Thomas W. Elrod, Esq.