A group of investors in a class action suit alleging Performance Sports Group, the company behind sports equipment brands Bauer Hockey and Easton Sports, made a series of misleading statements and/or omissions that artificially inflated and/or maintained the price of the now-bankrupt company’s stock, asked a New York court Monday to allow their claims against a pair of company officers to proceed, saying the officers should not be allowed to use the bankruptcy proceedings as a shield.
The investors claimed there was no legal justification to grant former PSG chief executive officer Kevin Davis and former president of PSG Brands Amir Rosenthal’s motion to extend the stay PSG’s October bankruptcy has imposed on their case against the company to the claims against the officers.
The investors argued Rosenthal and Davis did not have standing to make the motion, had not provided any proof proceeding with the claims against them would have a financial impact on PSG, that any indemnification claims they made would likely be rejected by the bankruptcy court, and that the balance of harms supported letting the claims go forward.
The investors also argued the bankruptcy court had jurisdiction over the issue and the motion should have been filed there. “Even there, I think it’s pretty much of a stretch,” said Carol Gilden, a Partner with Cohen Milstein’s Securities Litigation & Investor Protection practice and counsel for the investors. “I don’t think they’re going to get it.”
The full article can be read here.