NEW YORK, Aug. 26, 2015 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against AAC Holdings, Inc. (“AAC” or the “Company”) (NYSE:AAC) and certain of its officers. The class action, filed in United States District Court, Middle District of Tennessee, is on behalf of a class consisting of all persons or entities who purchased AAC securities between October 2, 2014 and August 3, 2015 inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased AAC securities during the Class Period, you have until October 23, 2015 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
AAC operates treatment facilities which provide inpatient substance abuse treatment for individuals with drug and alcohol addiction. AAC operates treatment facilities throughout the United States.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and misleading statements and failed to disclose material information, including with respect to legal proceedings brought against subsidiaries of the Company and several former and one current employees, including its President at the time, Jerrod N. Menz.
On October 1, 2014 AAC went public by selling 5 million shares of its common stock to public investors at a price of $15 per share. The stock began to trade on the New York Stock Exchange ("NYSE") on October 2, 2014. In its Form S-1 Registration Statement declared effective by the SEC on October 1, 2015 (the "S-1"), AAC disclosed that it was "not aware of any legal proceedings the ultimate outcome of which, in our judgment based on information currently available, would have a material adverse effect on our business, financial condition or results of operations."' AAC also disclosed that it is dependent on its senior management and that if any of them departed from the Company, it could have an adverse impact on the Company and its operations. Additionally, AAC disclosed that if its treatment centers in California, Nevada and Texas were closed, it would have a material adverse impact on the Company.
Known to, but undisclosed by Defendants, was that the California Department of Justice was investigating the death of a patient at AAC's Forterus treatment facilities in California. Specifically, a grand jury was impanelled to investigate AAC President Jerrod N. Menz ("Menz"), a then current Company employee, and three former employees and the California subsidiary for wrongful death. Indeed, in civil litigation involving the death of the patient, Gary Benefield, a California Assistant Attorney General filed an affidavit, prior to AAC's IPO, stating that he believed murder indictments would be handed down. Menz and AAC were both named defendants in the civil litigation involving Mr. Benefield's death.
On July 29, 2015 after the close of trading, AAC reported that a grand jury in California returned an indictment asserting "charges against subsidiaries of AAC and two current and three former employees." AAC itself did not reveal in its press release that the charges were second-degree murder and dependent adult abuse. AAC noted that Menz, who was also indicted, voluntarily stepped down as President of AAC. AAC also reported better than expected financial results for its 2015 second quarter.
On August 3, 2015, AAC filed its Form 10-Q in which it commented on the indictments. In the 10-Q AAC revealed that the indictments were for second-degree murder and dependent adult abuse. Stock market analysts also began to issue reports as to "How Murder Charges Could Hurt AAC Holdings." www.TheStreet.com. AAC's stock price fell again on August 3, 2015, declining $5.22 per share, or 14%. Then, on August 4, 2015, Bleeker Street Research ("Bleeker") published a report entitled "Even More Undisclosed Deaths And The Start Of Real Problems" at AAC. Bleeker reported that AAC "continues to deceive patients, investors and analysts about the extent of and details of patient deaths;" "At least 8 undisclosed patient deaths in California and Florida, as recent as 2014;" and "Ongoing pattern of illegal behavior led to patient deaths, and continues now despite patient deaths." AAC's common stock price plunged in reaction to this news, falling by $12.90 per share, or 39%. All totaled, since AAC disclosed that charges were being brought against Menz and its California subsidiaries, AAC's common stock price fell by $19.18 per share, or 49%, wiping out $153 million in market capitalization.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com