A dozen US law firms, which are preparing to file a class-action lawsuit against Grifols, are trying to file a lawsuit against the company on the grounds that it transmits “false information” to the market.. The Catalan company was last week accused by bearish Gotham City Research of maintaining debt with EBITDA (earnings before tax and depreciation) much higher than it actually has, which in the company’s view suggests the shares are “valued at zero.” ” This caused a sudden decline in Ibex shares, which had already accumulated a 40% decline. If Gotham’s allegations are proven, retail investors could be protected by US federal securities law and seek compensation. Given the loss of value in the market, these firms, pharmaceutical It has submitted forms to investors seeking to take legal action against the company, and has also requested cooperation in gathering information that could help demonstrate violations of U.S. laws in the pharmaceutical products market, including the values violated.
In forms posted on their websites, the companies state that the pharmaceutical company may be investigated for possible violations of securities laws, and shareholders are encouraged to come forward and seek damages. “If you have suffered losses as a result of the decline in Grifols’ share price and have questions about your legal rights, please Contact us to discuss your options free of charge by completing and submitting the form,” says the Wohl&Fruchter website.It also says the firm is investigating whether Grifols “violated federal securities laws based on allegations in a report published by the Gotham City fund.”
Class-action lawsuits are common in the United States, and law firms have sought out as many clients as possible to file suit against the Catalan company Grifols. On the contrary, In Spain, such requests are made on an individual basis and each investor must act on his own.. But at least 40 American lawyers need to be affected. Once the American justice system accepts the case, other affected parties who wish to join the case will be able to do so as well.
Last year, the Grifols company faced a collective action in the United States, where the blood products company received a lawsuit for failing to ensure the confidentiality of plasma donors in the United States. The Catalan pharmaceutical company had to agree to pay 16 million euros to 66,000 affected people in exchange for withdrawing the case.
The key to litigation in the United States is whether the law firms can find an issue that will constitute an indictment. Because of this reason, Some of the law firms preparing the case also state that they are open to all kinds of information on their internet forms.. “If you purchased Grifols securities, are knowledgeable or would like to learn more about these lawsuits, or have questions about this announcement regarding your rights, please contact Frank R. Cruz,” the firm’s message reads. Frank R. Cruz’s office. The Hagens Berman law firm even points out on its website that whistleblowers who provide nonpublic information to the Grifols investigation are protected by the SEC (the United States market regulator).
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In the case of Spain, it was firms Zunzunegui and Cremades & Calvo Sotelo that considered acting on behalf of minority investors on behalf of the Spanish Association of Minority Shareholders (Aemec). Currently, the National Securities Market Commission (CNMV) is investigating Grifols’ connections to Scranton, the holding company affiliated with the Grifols family. The key is in tunnel operations. These two words in the Gotham report actually mean: Operations related to the sale of Grifols to Scranton, a holding company consisting of two companies nominally owned by the Grifols family: Biotest (also known as BPC Plasma) and Haema. According to Gotham’s report, Grifols uses this operation to close his books, increase his profits and reduce his debt, and therefore concludes that the value of his shares should be zero.
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Gotham defines it this way: “The transfer of assets and profits outside companies for the benefit of those who control them”. In this case, it points out that the shareholders or management of the first company (in this case Grifols) are often the absolute owners of the second company (Scranton) and thus benefit from transactions they would otherwise take. “disaster.” It is worth remembering that although Grifols sold the Biotest and Haema companies to Scranton, it continued to consolidate both in its accounts, asserting that it had a purchase option.
By combining Biotest and Haema, the supposed benefit of the operation to Grifols would be that it would be able to “reduce” its debt by “at least 920 million” while increasing its 2022 profits by 82 million. Taking both factors into account, Gotham concludes that Grifols’ leverage (debt) is not equal to 6 times Ebitda as the company claims, but is “closer to 10 or 13 times.” Hence his devastating impression of the Catalan company Ibex and his statement that the value of the shares should be zero. In fact, the market reacted and caused real distress in the stock market. Shares valued at over 14 euros before the report are now trading below 9. Approximately 4 billion euros of the company’s capital appears to be floating.
Source: Informacion
James Sean is a writer for “Social Bites”. He covers a wide range of topics, bringing the latest news and developments to his readers. With a keen sense of what’s important and a passion for writing, James delivers unique and insightful articles that keep his readers informed and engaged.