NEW YORK Two former Thompson Creek Metals Co. Inc. investors are suing the company and certain executives for allegedly knowingly distributing "false and misleading" information that distorted the companys financial position, resulting in the investors suffering significant losses.
David Aronstein and Lesley Stroll filed a lawsuit in U.S. District Court in Connecticut against Thompson Creek, executive vice president and chief financial officer Pamela Saxton, head of investor relations Pamela Solly, former chief executive officer Kevin Loughrey and board members.
They allege that the company and the executives made "numerous material false statements and material omissions" in communications with investors, the U.S. Securities and Exchange Commission (SEC) and the public.
The alleged misstatements artificially inflated and maintained the stock price during a period when Aronstein and Stroll bought the majority of their shares, according to the lawsuit. It said they purchased more than $6.3 million worth of common shares in Thompson Creek between March 2011 and May 2012, and incurred losses of more than $3 million by the time they sold their shares.
The complaint cites numerous private exchanges with Thompson Creek management as well as public disclosures related to the funding of the Mount Milligan copper-gold project, alleging misleading disclosures in matters such as a $300-million revolving credit agreement between the company and several banks.
"Nowhere, in either the press release or the 10-K (filing) that (Thompson Creek) submitted to the SEC, do the defendants disclose the essential material fact that the credit facility had a liquidity provision that effectively limited the draw down to $225 million, a $75-million difference from what they repeatedly told the public," the lawsuit alleges. "This information was material, and its withholding significant, because contrary to its repeated statements (Thompson Creek) could not afford to develop Mount Milligan." As a result, the company "was forced to bridge this and further funding gaps by repeatedly raising additional capital through dilutive offerings that depressed the price of the shares."
"Thompson Creek believes that these claims are without merit and it intends to vigorously defend the claims and ask the court to dismiss them," Solly said in an e-mail to AMM.