NEW YORK, NY - (NewMediaWire) - October 11, 2020 - Faruqi & Faruqi, LLP, a leading minority and certified woman-owned national securities law firm, is investigating potential claims against Eastman Kodak Company (“Kodak” or the “Company”) (NYSE:KODK) and reminds investors of the October 13, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you suffered losses exceeding $80,000 investing in Eastman Kodak stock or options between July 27, 2020 and August 11, 2020 and would like to discuss your legal rights, click here: www.faruqilaw.com/KODK. There is no cost or obligation to you.
You can also contact Faruqi & Faruqi partner James Wilson toll free at 877-247-4292 or 212-983-9330 (Ext. 1310) or by emailing him at email@example.com to discuss your rights and options.
As detailed below, the lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) prior to the formal announcement of a $765 million transformative loan from the U.S. International Development Finance Corporation (“DFC”) under the Defense Production Act to produce pharmaceutical materials, including ingredients for COVID-19 drugs (the “$765 million DFC Loan” or “Loan”) and during what should have been a black-out period for insider stock activity, the Company’s Executive Chairman and named Defendant James V. Continenza was granted 1.75 million options, and other insiders were engaging in suspiciously-timed transactions based on material non-public information; (2) the Defendants had improperly leaked the information to the market on July 27, 2020 before the official announcement and actively engaged in a cover-up scheme; 3) the status and likelihood of the $765 million DFC Loan was misrepresented to the market for many reasons, particularly given the Company’s wrongful behavior in terms of secretly granting options to Defendant Continenza and other insider transactions while in possession of material non-public information, as well as improperly leaking the news and engaging in a cover up scheme of these facts; and (4) as a result of the foregoing, Defendants’ statements about Kodak’s business, operations, and prospects, were materially false and/or misleading and/or lacked a reasonable basis.
On July 29, 2020 after the market closed the first news suggesting wrongdoing by Kodak in connection with its disclosure of the government loan began to emerge when The Wall Street Journal published an article entitled “Tweets and Articles Sent Kodak Shares Surging Before Official Announcement.” The article stated that “Kodak sent a news advisory to media outlets without indicating the information wasn’t intended to be released publicly,” reporting that Kodak had shared information about an agreement between the company and the Trump administration with media outlets before the announcement on July 28, 2020. Some media companies reportedly published that information before deleting it following a request from the company.
On July 30, 2020, the first trading day following this news, Kodak’s shares fell by $3.37 per share, more than 10%, to close at $29.83 per share. Shares declined an additional $7.98 per share, nearly 27%, the next trading day to close at $21.85 per share on July 31, 2020.
Then, over the weekend of August 1-2, 2020, Reuters and other news sources reported that Defendant Continenza was granted options for 1.75 million shares on July 27, 2020 based on an informal and non-binding "understanding" with the Company’s board. These facts continued to be widely circulated on Monday August 3, 2020.
On the first trading day following this news, Kodak’s shares fell $6.91 per share, or 31.6%, to close at $14.94 per share on August 3, 2020.
Then, on the morning of August 4, 2020, multiple news sources reported that Senator Warren had asked U.S. regulators to examine possible insider trading prior to Kodak’s July 28, 2020 announcement of the $765 million DFC Loan, as well as potential disclosure violations involving Kodak after the Company’s shares soared when it announced a surprise foray into generic drugs with help from the $765 million DFC Loan. At the same time, news circulated on the morning of August 4, that Kodak’s disclosure of the Loan and the stock surge were already under examination by the SEC.
Later that day, The Wall Street Journal published an article confirming the rumors of the SEC probe and also again reported that news about the Loan had been leaked on July 27, contrary to Defendant Continenza’s assertions on July 29, 2020 that it had been kept a “tight-kept secret.”
Following this news, Kodak’s shares fell $0.54 per share, about 3.6%, to close at $14.40 per share on August 4, 2020.
On the morning of August 7, 2020, the Company issued a press release and filed a Form 8-K with the SEC announcing that the Kodak Board had opened an internal review of the disclosure of the $765 million DFC Loan.
Following this news, Kodak’s shares fell $1.23 per share, about 7.6%, to close at $14.88 per share on August 7, 2020.
Also on August 7, 2020, after the market closed, the DFC issued the following tweet indicating that the Kodak loan had been put on hold in light of the allegations of wrongdoing:
“On July 28 we signed a Letter of Interest with Eastman Kodak. Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared.”
Reports that the DFC had put the Kodak loan on hold pending the outcome of various investigations into potential wrongdoing by Kodak and its executives became widely circulated over the weekend of August 8-9, 2020.
On August 10, 2020, the first trading day following the news, Kodak’s shares fell by $4.15 per share, nearly 28%, to close at $10.73 per share.
Then on August 11, 2020, an article published by Dow Jones informed investors that according to a filing with the SEC during the prior week, one of Kodak’s Board members, George Karfunkel, had made a suspiciously-timed gift of 3 million shares to a congregation in Brooklyn, New York on July 29, 2020. According to the article, the gift was valued at over $116 million based on IRS rules, making it the single largest donation to a religious group.
On August 11, 2020, Kodak’s shares continued to fall, declining by $0.72 per share, about 6.7%, to close at $10.01 per share on August 11, 2020.
On August 11, 2020, after the market closed, in connection with the Company’s release of its financial results for the second quarter, Kodak held a conference call during which Defendant Continenza repeatedly referred to the loan as a “potential loan”, in stark contrast to his statements on July 29, 2020 that “[w]e feel very comfortable that we can bank on it.” Additionally, Defendant Continenza said that “we … support the DFC's decision to wait clarification before moving forward with the loan process.”
Following this news, Kodak’s shares declined farther by $0.29 per share, or 2.9%, to close at $9.72 per share on August 12, 2020.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Kodak’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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