The Kendall Law Firm, headed by former federal judge and a former United States attorney, piled on the third purported class action complaint against nuclear waste recycler EnergySolutions over its initial and secondary public offerings of securities.
Following the City of Roseville Employees’ Retirement System (complaint) and the Building Trades United Pension Trust Fund (complaint), the Kendall complaint alleges that statements made in the company’s offering documents about its opportunities in the nuclear industry were misleading in that EnergySolutions was not well situated to benefit from those opportunities. According to the Kendall complaint, the Company had petitioned the Nuclear Regulatory Commission in 2007 to change well-established regulations to allow funds from licensees’ decommissioning trust funds to be used for the cost of disposal of major radioactive components that have been removed from reactors before the permanent cessation of operations. The complaint further alleges that the business prospects of EnergySolutions were heavily dependent upon a favorable ruling from the NRC, even though the NRC had already addressed and rejected the issue stating that the purpose of the decommissioning trust funds is to ensure that licensees have adequate funds on hand for decommissioning activities at the time of license expiration.
According to the Kendall complaint, EnergySolutions later issued a press release on October 14, 2008, after its secondary public offering, revealing that the company was reducing its estimates for net income and that the financial crisis would delay their ability to accelerate the decommissioning of nuclear power plant assets. The press release also indicated that the NRC denied the Petition for rulemaking change. On this announcement, EnergySolutions’ stock dropped 44%, from $10.14 per share on October 13 to $5.64 on October 14 with extremely heavy trade volume.
From EnergySolutions’ website:
“EnergySolutions, headquartered in Salt Lake City, Utah, is an international nuclear services company with operations throughout the United States and around the world. With over 5,500 world-class professionals, EnergySolutions is a world leader in the safe recycling, processing and disposal of nuclear material. EnergySolutions provides integrated services and solutions to the nuclear industry, the United States Government, the Government of the United Kingdom, hospitals and research facilities.”