GT Solar
Practice Area: Securities Fraud
Current Status
On September 27, 2011, United States District Judge for the District of New Hampshire Joseph N. Laplante granted final approval of the proposed settlement reached between the plaintiffs and the defendants in this case. The settlement consists of $10,500,000 in cash. There were no objections to the settlement and no investors requested to be excluded from the class. The approval of the settlement resolves all claims asserted in the action and in a related state court action, both of which charged GT Solar International, Inc., certain of its officers and directors, and various underwriter defendants, with violations of the Securities Act of 1933.
Cohen Milstein Sellers & Toll PLLC serves as lead counsel in the securities class action lawsuit. The Arkansas Public Employees Retirement System serves as lead plaintiff.
Case Background
Cohen Milstein has been appointed Lead Counsel in ongoing securities litigation in the U.S. District Court for the District of New Hampshire on behalf of all persons or entities who purchased or otherwise acquired the common stock of GT Solar International, Inc. (“GT Solar” or the “Company”) pursuant or traceable to the Company’s false and misleading registration statement filed on July 23, 2008 and prospectus filed on July 24, 2008 (the “Prospectus”) (collectively, the “Registration Statement”) issued in connection with its July 24, 2008 initial public offering (“IPO”).
On December 22, 2008, Cohen Milstein filed a Consolidated Class Action Complaint which alleges that GT Solar and certain of its officers and directors violated of the Securities Act of 1933 in connection with the Company’s IPO. In the IPO, 30.3 million shares of GT Solar stock were sold at $16.50 per share. The $500 million proceeds from the IPO were disbursed to GT Solar Holdings, LLC (“GT Holdings'”), and then distributed to GT Holdings’ shareholders. None of the proceeds were distributed to GT Solar.
The complaint alleges that the Registration Statement failed to disclose that GT Solar's largest customer, LDK Solar Co., Ltd. (“LDK Solar” or “LDK”), which accounted for 62% of the Company’s revenue during the fiscal year ended March 31, 2008, had ceased ordering GT Solar’s principal product, DSS Furnaces, from GT Solar and that LDK had decided to purchase furnaces from a competitor of GT Solar. On July 25, 2008, one day after the IPO, LDK announced that it had entered into a three-year contract to purchase furnaces from JYT Corporation.
As a result, GT Solar stock, which was sold in the IPO for $16.50 per share, sold as low as $9.30 per share, and closed at $12.59 per share, on July 25, 2008, a drop of 23% from the IPO price one day earlier.
On October 7, 2009 the court denied in its entirety a motion by the defendants to dismiss the case. In its order denying the motion, the Court’s stated that “the statements in GT Solar’s prospectus about the market-leading position of the company’s DSS furnace and its promotion of recurring sales could be considered misleading in light of the undisclosed risk that the product would very soon lose its spot atop the market, and a large portion of its recurring sales, as a result of LDK’s impending departure.”