Rayonier Advanced Materials Accused of Misleading Investors
by Erin Shaak
Last Updated on May 8, 2018
City of Warren General Employees’ Retirement System v. Rayonier Advanced Materials, Inc. et al.
Filed: August 17, 2017 ◆§ 3:17-cv-01167
Rayonier Advanced Materials, Inc. and two of its executive officers are defendants in a proposed class action lawsuit filed by a Rayonier stockholder who claims the defendants published misleading statements about the company’s business.
Tennessee
Rayonier Advanced Materials, Inc. and two of its executive officers are defendants in a proposed class action lawsuit filed by a Rayonier stockholder who claims the defendants published misleading statements about the company’s business. The suit concerns a dispute between Rayonier, a cellulose specialties provider, and its biggest customer, Eastman Chemical Company, that was allegedly hidden from the investing public for almost a year.
According to the complaint, Eastman had requested on numerous occasions that Rayonier lower its prices in accordance with a “meet and release” provision in the parties' contract that supposedly allowed Eastman to purchase cellulose specialties from an approved third party if Rayonier refused to match prices. Despite its troubles with Eastman and the resulting loss of business, Rayonier reportedly continued to publish positive statements about the company’s performance and future success. The suit claims these statements “lacked a reasonable basis” and unlawfully misled investors into paying an inflated price for company stock.
When the defendants finally revealed to the public on August 18 and 19, 2015 that the company had filed a dispute with Eastman, stock prices dropped 44 percent, the complaint says.
The suit seeks to cover a proposed class of people or entities who purchased Rayonier common stock between October 29, 2014 and August 19, 2015.
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