NEW YORK, May 04, 2023 (GLOBE NEWSWIRE) -- Kaplan Fox & Kilsheimer LLP reminds investors that a complaint has been filed on behalf of investors who purchased or otherwise acquired Loyalty Ventures, Inc. common stock (“Loyalty Ventures” or the “Company”) (OTC: LYLTQ) between November 8, 2021 and June 7, 2022, inclusive (the “Class Period”). Click Here to Join Investigation.
If you acquired Loyalty Ventures common stock during the Class Period and would like to discuss this case, please click here. You may also contact us by emailing pmayer@kaplanfox.com or calling (646) 315-9003.
If you are a member of the proposed Class, you may move the court no later than June 26, 2023 to serve as a lead plaintiff for the purported class. If you have losses, we encourage you to contact us to learn more about the lead plaintiff process.
Loyalty Ventures, a company that operates the AIR MILES Reward Program (the “Program”), was created as the result of a November 2021 spinoff from Alliance Data Systems Corporation (“ADS”). As alleged in the complaint, leading up to the spin-off, ADS touted Loyalty Ventures’ “highly attractive financial profile,” including referencing a number of customers of Loyalty Ventures such as Sobeys Inc., the second-largest supermarket chain in Canada and the second-largest sponsor in the Program.
However, according to the complaint, the truth was revealed before the markets opened on June 8, 2022, when Loyalty Ventures issued a press release announcing that on June 7, 2022 Sobeys provided notice of its intent to exit the Program. Following this news, the price of Loyalty Ventures common stock fell $5.01 per share, more than 45%, from a closing price of $11.03 per share on June 7, 2022 to a closing price of $6.02 per share on June 8, 2022.
Shortly after the Class Period, and just 15 months after Loyalty Ventures became a publicly traded company, on March 9, 2023, Loyalty Ventures filed for Chapter 11 Bankruptcy. Further, on March 10, 2023 CEO Charles Horn filed a declaration in support of the bankruptcy petition stating that prior to the spinoff, “Sobeys informed ADS that it was considering exercising its early termination rights and renegotiating or discontinuing its participation in the AIR MILES Reward Program before the expiration of the contract” and that “[t]he threat of Sobeys’s departure or re-pricing loomed throughout 2021 in the lead up to the Spinoff Transaction.”
The complaint alleges that ADS and the other defendants misrepresented and/or failed to disclose to investors that (1) the Program suffered from a lack of investment prior to the spinoff; (2) as a result, Sobeys, one of Loyalty Ventures’ largest customers, had informed Defendants it was considering exercising its early termination rights; (3) the threat of Sobeys’ departure loomed throughout 2021, including in the timeframe leading up to the spinoff; (4) Defendants expected the departure of any single large Sponsor, such as Sobeys, would have a “network effect” on the value of the entire Program; (5) the high leverage and debt service obligations foisted upon Loyalty Ventures, in conjunction with the “network effect” impact on the value of the Air Miles business, threatened the Company’s ability to continue operations; and (6) as a result, defendants’ positive statements about the Company’s financial guidance, business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
WHY CONTACT KAPLAN FOX - Kaplan Fox is a leading national law firm focusing on complex litigation with offices in New York, Oakland, Los Angeles, Chicago and New Jersey. With over 50 years of experience in securities litigation, Kaplan Fox offers the professional experience and track record that clients demand. Through prosecuting cases on the federal and state levels, Kaplan Fox has successfully shaped the law through winning many important decisions on behalf of our clients. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
If you have any questions about this Notice, your rights, or your interests, please contact:
Pamela Mayer
KAPLAN FOX & KILSHEIMER LLP
800 Third Avenue, 38th Floor
New York, New York 10022
(646) 315-9003
E-mail: pmayer@kaplanfox.com
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
1999 Harrison Street, Suite 1560
Oakland, California 94612
(415) 772-4704
Fax: (415) 772-4707
E-mail: lking@kaplanfox.com
