Labaton Sucharow LLP Files Securities Class Action Lawsuit Against Peabody Energy Corp. and Certain Affiliates
Labaton Sucharow LLP (“Labaton Sucharow”) announces that on September 28, 2020, it filed a securities class action lawsuit, captioned Oklahoma Firefighters Pension and Retirement System v. Peabody Energy Corp., No. 20-cv-08024 (S.D.N.Y.) (the “Action”), on behalf of its client Oklahoma Firefighters Pension and Retirement System (“Oklahoma Fire”) against Peabody Energy Corp. (“Peabody” or the “Company”) (NYSE: BTU) and certain executive officers (collectively, “Defendants”). The Action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5 promulgated thereunder, on behalf of all persons or entities who purchased or otherwise acquired Peabody common stock from April 3, 2017 through October 28, 2019, inclusive (the “Class Period”), and were damaged thereby (the “Class”).
Peabody is currently the largest coal mining company in the world, with 23 coal mines throughout the United States and Australia. One of its mines in Australia is the North Goonyella mine, which was acquired by Peabody in 2004 and through which the Company ships coal to customers in India, China and South Korea. As of the start of the Class Period, the North Goonyella mine was considered Peabody’s most profitable single operation.
The Action alleges that, from April 3, 2017 through September 28, 2018, Defendants failed to disclose, and would continue to omit, the following adverse facts pertaining to the safety practices at the Company’s North Goonyella mine, which were known to or recklessly disregarded by Defendants: (i) the Company had failed to implement adequate safety controls at the North Goonyella mine to prevent the risk of a spontaneous combustion event; (ii) the Company failed to follow its own safety procedures; and (iii) as a result, the North Goonyella mine was at a heightened risk of shutdown.
The truth about Peabody’s inadequate safety practices was revealed when, on September 28, 2018, a fire erupted at the mine, forcing Peabody to suspend operations indefinitely. On this news, Peabody shares fell $5.543 per share, or 13.4 percent.
The Action further alleges that, following the fire and throughout the remainder of the Class Period, Defendants failed to disclose, and would continue to omit, the following adverse facts pertaining to the feasibility of Peabody’s plan to restart the North Goonyella mine: (i) the Company’s low-cost plan to restart operations at the mine posed unreasonable safety and environmental risks; (ii) the Australian body responsible for ensuring acceptable health and safety standards, the Queensland Mines Inspectorate (“QMI”), would likely mandate a safer, cost-prohibitive approach; and (iii) as a result, there would be major delays in reopening the North Goonyella mine and restarting coal production.