TORONTO--(BUSINESS WIRE)--Morganti & Co., P.C., a cross border shareholder’s rights law firm, is representing investors in a shareholder class action lawsuit against Just Energy Group Corp. (TSX:JE) (“JE” or “Just Energy”) seeking to recover money resulting from the drop in share price on July 23, August 5, and August 15, 2019.
Despite the Company’s repeated representations of material fact, however, in a series of Public Corrective Disclosures (i.e., “storm warnings”) released between July 23 through August 15, 2019 (the “Public Corrective Disclosures”), JE revealed that:
- During January 2019, the Company identified a deficiency in the design and operating effectiveness of certain internal controls related to certain account balances in certain markets as it applied to certain gross margin accounts in those markets: identifying a $14.2 million error in the opening accumulated deficit account;
- Management identified consumer enrolment and non-payment issues, primarily in Texas;
- Management identified an impairment of certain accounts receivable within the Texas market of approximately $45 to $50 million;
- Management identified an impairment of certain accounts receivables within the U.K. market of approximately $74 million;
- Based on the evaluation conducted by or under the supervision of the CEO and CFO in connection with the Company’s internal controls over financial reporting, it was concluded that the Company did not have effective controls and procedures because there were material weaknesses during the quarters ended December 31, 2018, March 31, 2019, and June 2019, management failed to effectively operate a control to capture appropriate expected credit loss rates to be reflected in the estimated allowance for doubtful accounts in Texas residential and U.K. markets; and
- Due to the reclassification of the U.K. business and impairment, the Company was revising its 2020 base EBITDA down to $180 to $200 million and free cash flow guidance down to $50 and $70 million.
The Public Corrective Disclosures had the foreseeable effect of removing the artificial inflation in the Company’s stock price that had resulted from the aforementioned misrepresentations by dropping over 60% in price and value.
Investors that purchased JE’s securities between May 31, 2018 and August 15, 2019 (the “Class Period”), may have an opportunity to recover their financial losses. Investors are encouraged to contact Morganti & Co. to register their interest and determine their financial losses, if any. Investors will not be charged for this service.
About Morganti & Co.
You may learn more about Morganti & Co. online at www.morgantico.com. Since June 1999, Mr. Morganti has represented investors and is licensed to provide legal opinions about the Ontario Securities Act and the U.S. federal securities laws.
You may contact Morganti & Co. at (647) 344-1900 or by email at firstname.lastname@example.org for further information. This press release may be considered attorney advertising in some jurisdictions under the applicable law and ethical rules.