NEW YORK, Sept. 14, 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, and docketed under 15-cv-00986, 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 throughout the United States which provide inpatient substance abuse treatment for individuals with drug and alcohol addiction.
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 current employees, including its President at the time, Jerrod N. Menz.
Known to, but undisclosed by the Company at the time of its October 2, 2014 IPO, 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 impaneled to investigate three former employees and the Company’s 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 in 2013, prior to AAC's IPO, stating that he believed murder indictments would be handed down. 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 indictment was for second-degree murder and dependent adult abuse. AAC announced that Menz, who was also indicted, voluntarily stepped down as President of AAC.
On August 3, 2015, the Company disclosed that the indictments were for second-degree murder and dependent adult abuse. On this news, AAC's stock price fell again on August 3, 2015, declining $5.22 per share, or 14%. Then, on August 4, 2015, Bleecker Street Research reported that AAC had been aware of the California Department of Justice’s investigation into Benefield’s death, that [a]t least 8 undisclosed patient deaths [had occurred] in California and Florida, as recent as 2014," and that an "[o]ngoing 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