Investors suing two executives of Performance Sports Group for allegedly bankrupting the sports gear manufacturer are fighting back against a dismissal bid, saying the bigwigs clearly misled shareholders by touting "organic" growth that was really driven by self-destructive "gun to head" sales practices and accounting gimmicks.
The defendants, former PSG CEO Kevin Davis and former Chief Financial Officer Amir Rosenthal, filed a motion to dismiss the suit in October, arguing that lead plaintiff Plumbers & Pipefitters National Pension Fund's securities fraud claims are way off-base. The pair said all the sales numbers they presented to investors in the run-up to PSG's 2016 bankruptcy were technically accurate, and they weren't required to get into the weeds of their sales tactics when discussing the company in public, among other things.
But in an opposition brief filed Thursday, the pension fund said those arguments fall flat.
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“We believe this is a strong case, as the evidence obtained and included in the amended complaint has borne out," Gilden said. "We look forward to obtaining a decision from the court on the sufficiency of the allegations pled.”
PSG was formed in 2014 after the well-known hockey brand Bauer purchased the similarly iconic baseball gear maker Easton for $330 million. PSG held an IPO on the New York Stock Exchange in 2015 and went bankrupt roughly two years later.
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Plumbers & Pipefitters National Pension Fund is represented by Carol V. Gilden, Alice R. Buttrick, Steven J. Toll, Megan Kinsella Kistler and S. Douglas Bunch of Cohen Milstein Sellers & Toll PLLC and James R. O'Connell and Mark W. Kunst of O'Donoghue & O'Donoghue LLP.
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