SAN DIEGO & FRANKLIN, Tenn.--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that a purchaser of Community Health Systems, Inc. (NYSE: CYH) filed a derivative complaint against the company's directors for breach of fiduciary duty from February 20, 2017 to the present. Community Health owns, leases, and operates general acute care hospitals.
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Community Health Systems, Inc. (CYH) Accused of Misleading Shareholders
According to the derivative complaint, Community Health's directors breached their fiduciary duty by misleading investors through a series of SEC reports that over-recorded net revenue and artificially inflated Community Health's stock. On January 1, 2018, Community Health adopted a new accounting standards update ("ASU") that altered the way Community Health recognized revenue, prompting the company to reexamine its previous financial statements. Following the review, Community Health issued a press release on February 27, 2018, revealing that it would be expecting a drop in net revenue for the final quarter and fiscal year 2017 due to previously under-reported provisions for bad accounts and contractual adjustments. On this news, Community Health's stock fell over 17%, to close at $5.12. Today the stock trades at $2.24 and Community Health, its chairman, and its CEO have been named defendants in a securities class action lawsuit, potentially causing further harm to investors.
Community Health Systems, Inc. (CYH) Shareholders Have Legal Options
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. Click Here to receive free alerts from Stock Watch when companies engage in wrongdoing.
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