Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against La Quinta Holdings Inc. (LQ)


NEW YORK, April 29, 2016 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against La Quinta Holdings Inc. (“La Quinta” or the “Company”) (NYSE:LQ) on behalf of purchasers of La Quinta common stock pursuant to the Company’s secondary public offering (the “SPO”) on or about March 24, 2015, seeking to pursue remedies under the Securities Act of 1933 (the “Securities Act”), as well as on behalf of purchasers of La Quinta common stock between February 25, 2015 and September 17, 2015, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”).

According to the Complaint, Defendants failed to disclose material adverse facts about the La Quinta’s true financial condition, business and prospects. Specifically, the Complaint alleges that Defendants misrepresented and/or failed to disclose, among other things, the following facts that: (a) there was a material slowdown in demand for its hotel rooms in its key Texas market during the Class Period; (b) La Quinta was experiencing disruptions associated with a “transition” of the Company’s reservation call center, which was having a material adverse effect on the Company’s operations; (c) La Quinta was facing market share losses and declining customer demand due, in part, to its outdated facilities; (d) a significant number of La Quinta’s hotels were in need of major renovation, which would require significant capital expenditures and result in operational disruptions; (e) La Quinta had overstated the amounts buyers were willing to pay for certain of its properties; (f) the above were reasonably likely to have a material adverse effect on La Quinta’s future operating results; and (g) Defendants lacked a reasonable basis for the Company’s 2015 guidance and their positive statements about La Quinta’s then-current business and future financial prospects.

On July 29, 2015, La Quinta announced its financial results for the second quarter of 2015, ended June 30, 2015.  La Quinta reported that its earnings had been adversely affected by a $4 million loss on the sale of a property and an approximate $42 million impairment charge associated with the potential sale of 24 Company-owned hotels.  In response, the price of La Quinta common stock declined approximately 3.5% on July 30, 2015.  Further, on September 17, 2015, La Quinta announced that it had further reduced its 2015 financial guidance and that its President and Chief Executive Officer had stepped down from his leadership positions in the Company by mutual agreement with the Company’s Board of Directors.  In response to these revelations, the price of La Quinta common stock declined more than 15% on September 18, 2015.

If you wish to serve as lead plaintiff, you must move the Court no later than June 24, 2016. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.

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