Legal Storm Brews as Law Firms Eye Class Action Suit Against Aegean, Former Management

Law firms eye legal action against Aegean. File Image / Pixabay

With one complaint already filed, several US-based law firms today announced they are investigating Aegean Marine Petroleum Network [NYSE:ANW] (Aegean) with a view to launching a class action suit against the bunker supplier.

The move comes after Aegean yesterday said it believes approximately $200 million of accounts receivable at December 31, 2017 will need to be written off following the discovery of suspect transactions.

One firm, New York-based Levi & Korsinsky, LLP representing plaintiff Nick Simco and others, today appeared to be the first to file such a complaint, which was made at the United States District Court, Southern District of New York.

Aegean, along with former CEO and President E. Nikolas Tavlarios and former CFO Spyros Gianniotis, were named as defendants.

Simco alleges that the company made statements that were "materially false and/or misleading" and specifically that there was a failure to disclose that "Aegean had improperly accounted for an approximate $200 million of accounts receivable as of December 31, 2017."

"Each of the Individual Defendants ... was aware of or deliberately recklessly disregarded the fact that the false and misleading statements were being issued concerning the Company," the complaint reads.

As reported yesterday, the suspect transactions were discovered by an Aegean Audit Committee comprised of newly elected board members and independent legal counsel.

"The Company has reported its preliminary findings to the U.S. Securities and Exchange Commission and the Department of Justice and intends to cooperate with any resulting investigations," Aegean said in an SEC filing Monday, an announcement that resulted in a precipitous fall in the company's share price.

"On this news, Aegean's share price fell more than 70% on June 5, 2018, thereby injuring investors," said California-based Glancy Prongay & Murray LLP.

Schall Law Firm, also based in California, were among firms saying their investigation "focuses on whether the Company issued false and/or misleading statements and/or failed to disclose information pertinent to investors."

But with a number of fresh faces joining the Aegean board last month, the company also hinted it could be taking legal action of its own.

"The Audit Committee is continuing its review and investigation of the [suspect] Transactions and other matters, with the assistance of independent counsel and forensic accounting advisors, and will pursue all available legal recourse against individuals and entities involved in the [suspect] Transactions," Aegean said yesterday.