SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that a securities class action case has been filed on behalf of purchasers of Community Health Systems, Inc. (NYSE:CYH) securities between February 20, 2017 and February 27, 2018 (the “Class Period”) in the U.S. District Court for the Middle District of Tennessee. The case is captioned Padilla v. Community Health Systems, Inc., No. 3:19-cv-00461, and is assigned to Judge Richardson.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Community Health securities during the Class Period to seek appointment as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff or have questions concerning your rights, please contact Chris Wood or Brian Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com or firstname.lastname@example.org. Lead plaintiff motions must be filed with the court no later than July 29, 2019.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information, including that the Company had understated its contractual allowances and provision for bad debts, which had resulted in the Company overstating its net operating revenue and understating its net loss. As a result of this information being withheld from the market, Community Health securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $10 per share.
On February 27, 2018, the Company announced its fourth quarter and full year 2017 financial results, which included a $591 million increase in contractual allowances and bad debt provision. Specifically, the Company stated that it had “completed an extensive analysis of its patient revenues and patient accounts receivable and developed new accounting processes and methodologies” in connection with its adoption of new revenue recognition accounting standards on January 1, 2018, as required by generally accepted accounting standards. The analysis also included “an evaluation of patient accounts receivable retained after the 2017 divestitures of 30 hospitals, and certain other revenue.” Based on this analysis, the Company’s financial results included “a change in estimate recorded by the Company during the three months and year ended December 31, 2017 to increase contractual allowances and the provision for bad debts by approximately $591 million.” On this news, the Company’s stock price declined more than 17%, to close at $5.12 per share on February 28, 2018.
Robbins Geller is a national law firm representing investors in securities litigation. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. Robbins Geller recently obtained a plaintiff’s verdict in a securities class action against a biotech company in federal court in Orange County, California, with the jury finding defendants had committed securities fraud and awarding shareholders up to $100 million in damages. See https://www.rgrdlaw.com/news-item-Robbins-Geller-Announces-Verdict-in-Trial-Against-Puma-Biotechnology.html. For five consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in both the amount recovered for shareholders and the total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also advocates for corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.