SAN DIEGO & HAMILTON, Bermuda--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed against Teekay Corporation (NYSE: TK) in the U.S. District Court for the District of Connecticut. The complaint is brought on behalf of all purchasers of Teekay securities between June 30, 2015 and December 17, 2015, for alleged violations of the Securities Exchange Act of 1934 by Teekay's officers and directors. Teekay primarily provides crude oil and gas marine transportation services in Bermuda and internationally. Teekay gets the vast majority of its cash flow from the distributions paid by its master limited partnerships ("MLPs"), Teekay LNG Partners L.P. ("TGP") and Teekay Offshore Partners L.P. ("TOO").
View this information on the law firm's Shareholder Rights Blog:
Teekay Accused of Misleading Investors About Its Dividend Payments
According to the complaint, on June 30, 2015, Teekay officials increased the company's quarterly dividend by 75% to $0.55 per share, assuring investors that the company would at least maintain this higher dividend, and that the company intended to increase it by 15-20% in the coming years. In several subsequent earnings calls with analysts, Teekay officials predicted an optimistic outlook for the company's dividends, emphasizing the robust pipeline of $6.2 billion of growth projects at its daughter entities stretching to 2020. However, the complaint alleges that Teekay failed to disclose that: (1) the company's repeated assurances that it would maintain a quarterly dividend of at least $0.55 per share were baseless; (2) the company knew that it could not support future dividend payments in excess of $0.55 per share; and (3) the cash flows from the company's MLPs (TGP and TOO) could not possibly sustain such high dividends.
On December 16, 2015, Teekay revealed in a press release that the company's quarterly dividend was being reduced by 90% to only $0.055 per share, commencing with the fourth quarter of 2015 dividend payable in February 2016. Deutsche Bank commented that the reduced dividend was a "surprising announcement" that "represents a significant about-face for the company" and cut its price target from $60 to $10 per share. On this news, Teekay's stock declined over 58% to close at $7.27 per share on December 17, 2015.
Teekay Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
Attorney Advertising. Past results do not guarantee a similar outcome.