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February 3, 2021 - The court preliminarily approved the settlement.
January 5, 2021 - A stipulation of settlement was filed by the parties.
March 28, 2019 - The court denied the defendants' motion to dismiss.
June 12, 2017 - A motion to dismiss the amended consolidated complaint was filed.
March 31, 2017 - An amended consolidated complaint was filed.
April 22, 2016 - An investor in shares of Horsehead Holding Corp (NASDAQ: ZINC) filed a lawsuit in the U.S. District Court for the District of Delaware over alleged Securities Laws violations by Horsehead Holding Corp in connection with certain allegedly false and misleading statements made between May 21, 2014 and February 2, 2016. On February 2, 2016, Horsehead Holding Corp filed for protection under the bankruptcy laws and, therefore, is not named as a defendant in the lawsuit.
In September 2011, Horsehead Holding Corp began construction on a new, purportedly state-of-the-art zinc production facility located in Mooresboro, North Carolina (the Mooresboro Facility ). Horsehead Holding Corp heralded a new zinc production process to be used at the Mooresboro Facility and stated that the new facility's design would rely on sustainable manufacturing practices to produce zinc solely from recycled materials and allow the Company to produce new high-grade zinc varieties. Horsehead also stated that the Mooresboro Facility would produce over 155,000 tons of zinc metal annually once fully operational. According to the complaint the plaintiff alleges on behalf of purchasers of Horsehead Holding Corp (NASDAQ: ZINC) common shares between May 21, 2014 and February 2, 2016, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between May 21, 2014 and February 2, 2016, defendants issued allegedly materially false and misleading statements and/or allegedly failed to disclose adverse information regarding Horsehead Holding Corp's business, prospects and operations, including that construction defects at the Mooresboro Facility had left the facility unable to operate as planned, that operational problems at the facility were significant, pervasive and the result of fundamental engineering and operational defects, that Horsehead Holding Corp had not rectified the problems at the Mooresboro Facility and did not know how to rectify such problems, and as a result, production disruptions and tens of millions of dollars in costs related to these problems were likely and anticipated that instead of permanently fixing problems at the Mooresboro Facility, Horsehead Holding Corp was employing expensive, temporary workarounds in order to achieve even limited production capacity, and as a result, the facility was not providing significant cost savings, but was instead causing the Company to spend cash at an unsustainable rate, that the Mooresboro Facility did not have an annual zinc production capacity of 155,000 tons and could not even sustainably achieve 50% of that capacity, that operational issues at the Mooresboro Facility were not improving, but in fact were deteriorating, as stop-gap measures used by the Company to boost production in the short term were unsustainable, untested, highly risky and causing decreased operational stability, and that Horsehead Holding Corp did not have sufficient liquidity, cash on hand and anticipated cash flows for general corporate purposes to sustain it through the full ramp-up of the Mooresboro Facility. As a result of these false statements and omissions, Horsehead Holding Corp securities traded at artificially inflated prices between May 21, 2014 and February 2, 2016, with its stock price reaching a high of $20.70 per share.
On January 23, 2015, Horsehead Holding Corp conducted a secondary offering of 5.75 million shares of its common stock at $12.75 per share and as a result of the secondary offering, Horsehead Holding Corp generated approximately$73 million in gross offering proceeds. Then, according to the complaint, Horsehead Holding Corp began to reveal various production problems at the Mooresboro Facility.
On December 10, 2015, ratings agency Moody's downgraded the Company's corporate debt due to recurring problems at the Mooresboro Facility. By early January 2016, the Company had failed to make an interest payment to certain holders of the Company's convertible senior notes and shortly thereafter defaulted on multiple credit agreements.
On January 22, 2016, Horsehead Holding Corp announced that it was idling the Mooresboro Facility and laying off most employees at the site. Then on February 2, 2016, Horsehead Holding Corp announced that it had initiated bankruptcy proceedings under Chapter 11 of the U.S. Bankruptcy Code.
Subsequently, on February 11, 2016, trading in Horsehead Holding Corp stock was suspended and on February 23, 2016, the Company's common stock was removed from listing on the NASDAQ stock exchange. At the time that trading in Horsehead Holding Corp stock was suspended the price of the stock had fallen to $0.08 per share.