Scott and Scott, Attorneys at Law, LLP has filed a class action complaint in the United States District Court of Connecticut on behalf of investors who purchased Teekay Corporation’s common stock between June 30, 2015 and December 17, 2015, the law firm said.
The complaint alleges that during the period, Teekay made false and/or misleading statements with respect to keeping a quarterly dividend of at least USD 0.55 per share adding that the assurances were baseless.
In addition, the complaint alleges that the company knew, based on then-present facts, that it could not support future dividend payments in excess of the said amount adding that the cash flows from the company’s master limited partnerships (MLPs) – Teekay LNG Partners LP and Teekay Offshore Partners LP – could not possibly sustain such high dividends.
In conclusion, the law firm claims that Teekay misled the market about the strength of its business and financial condition.
On December 16, 2015, Teekay said that its Board of Directors had approved a plan to reduce the company’s quarterly dividend to USD 0.055 per share, down from USD 0.55 per share in the third quarter of 2015, commencing with the fourth quarter of 2015 dividend payable in February 2016. On this news, Teekay’s share price declined 58%.
According to the law firm, any investor that purchased Teekay stock, who wishes to serve as a lead plaintiff in the action, must move the court no later than May 2, 2016.