Counsel for defendants Superior Offshore International, Inc., its officers and directors, and underwriters of its initial public offering (IPO) retained Cornerstone Research and Professor Christopher James of the University of Florida to address class certification and damages issues in this Section 11 securities case.
Counsel for defendants Superior Offshore International, Inc., its officers and directors, and underwriters of its initial public offering (IPO) retained Cornerstone Research and Professor Christopher James of the University of Florida to address class certification and damages issues in this Section 11 securities case. The United States District Court for the Southern District of Texas, Houston Division, granted our clients’ motion to deny class certification.
The court granted our clients’ motion to deny class certification.
Professor James demonstrated that prior to Superior Offshore’s IPO and allegedly corrective disclosures, information related to allegedly withheld facts was already in the public domain. This included the industry-wide decline of work in the Gulf of Mexico and the company’s intention to transition to deep-water work. He also concluded that most of the decline in the value of Superior Offshore’s stock was caused by new information unrelated to the prospectus or realization of disclosed risks. Based on Professor James’ report, counsel for defendants moved to deny class certification, arguing, among other things, that plaintiffs failed to establish the predominance requirement of Rule 23(b)(3).
The court ruled in favor of our clients, stating: “A substantive issue that may control the outcome of the case… is whether any investor knew at the time he acquired his shares of Superior stock that the information in the registration statement was materially false or misleading. …As more information became available during the proposed class period, it became more likely that an individual purchaser of Superior’s IPO shares had knowledge that would support the affirmative defense asserted by defendants.”