WILMINGTON, Del.--(BUSINESS WIRE)--Rigrodsky & Long, P.A. and The Egleston Law Firm announce that they have filed a shareholder class action lawsuit in the United States District Court for the District of Delaware on behalf of all persons or entities who purchased or otherwise acquired the securities of Raser Technologies, Inc. (“Raser” or the “Company”) (Other OTC: RZTIQ.PK) between May 11, 2009 and April 29, 2011, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 (the “Complaint”). The case is entitled Bartesch v. Cook, C.A. No. 11-CV-1173 (D. Del.).
If you wish to view a copy of the Complaint, discuss this action, or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Noah R. Wortman, Case Development Director of Rigrodsky & Long, P.A., 919 North Market Street, Suite 980 Wilmington, Delaware, 19801 at (888) 969-4242, by e-mail to info@rigrodskylong.com, or at: http://www.rigrodskylong.com/news/raser-technologies-inc; or Gregory M. Egleston, Esquire of The Egleston Law Firm, 440 Park Avenue South, New York, New York, 10016 at (212) 683-3400 or by e-mail to egleston@gme-law.com.
Raser is purported to be an environmental energy technology company focused on geothermal power development and technology licensing. On April 29, 2011, Raser and its wholly-owned subsidiaries filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware. As a result of Raser’s filing for protection under the Bankruptcy Code, it has not been named as a defendant.
The Complaint names certain of the Company’s current and former directors and officers as defendants. The Complaint alleges that the Defendants failed to disclose material adverse facts regarding the Company’s Thermo No. 1 geothermal plant. Unbeknownst to the investment community, soon after it was completed, the Thermo No. 1 geothermal plant evidenced material design deficiencies and use of inefficient recirculation pumps. In addition, heat transfer could not be implemented successfully because of an inadequate testing of well field temperature and an inadequate test of well flow prior to construction. As a result, by approximately June 2009, Defendants knew that the Thermo No. 1 geothermal plant could not raise its output above a net level of approximately 6.6 megawatts and, at this level, it was impossible for the Thermo No. 1 geothermal plant to operate at a profit or for the cost of the plant to be recovered through ongoing operations. Accordingly, for accounting purposes, the Thermo No. 1 geothermal plant was impaired.
Had Raser properly recognized its impairment losses throughout the Class Period: (i) Plaintiff and the Class would have been made aware of the fact that the Thermo No. 1 geothermal power plant was incapable of generating cash sufficient to recover its carrying value, and (ii) the Company’s balance sheet would have reflected the fact that liabilities materially exceeded assets and that, accordingly, the Company was in a technical state of bankruptcy, which might have triggered adverse actions by Raser’s creditors. Defendants’ failure to disclose the existence of the design deficiencies that limited Thermo No. 1’s output, and Defendants’ material overstatement of the carrying value of Thermo No. 1, caused the market price of Raser’s common stock to be artificially inflated during the Class Period.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
Rigrodsky & Long, P.A., with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.
The Egleston Law Firm is based in New York and litigates throughout the State of New York in both state and federal court and throughout the country. The founder of the firm, Gregory M. Egleston, has been engaged in the practice of law for more than ten years. The Egleston Law Firm concentrates in class action litigation on behalf of investors, consumers and small businesses.
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