SOTERA HEALTH COMPANY SHAREHOLDERS HAVE AN OPPORTUNITY TO RECOVER THEIR INVESTMENT LOSSES
Sotera Health Company
Bernstein Liebhard LLP announces that a securities class action lawsuit has been filed on behalf of investors who purchased or acquired Sotera Health Company (“Sotera” or the “Company”) (NASDAQ: SHC): (i) pursuant and/or traceable to the Company’s initial public offering conducted on or around November 20, 2020 (the “IPO”); (ii) pursuant and/or traceable to the Company’s secondary public offering conducted on or around March 18, 2021 (the “SPO,” and together with the IPO, the “Offerings”); and/or (iii) between November 20, 2020 and September 19, 2022, inclusive. The lawsuit seeks to recover Sotera shareholders’ investment losses.
If you purchased common stock in Sotera (i) pursuant and/or traceable to the Company’s IPO; (ii) pursuant and/or traceable to the Company’s SPO; and/or (iii) between November 20, 2020 and September 19, 2022, inclusive, and would like to discuss your legal rights and/or options, please click “Join Class Action” above.
Sotera provides sterilization and lab testing and advisory services to the medical device and pharmaceutical industries. The Company operates through three businesses: Sterigenics, Nordion, and Nelson Labs. Through its Sterigenics brand, which accounts for the majority of Sotera’s annual revenues, Sotera provides outsourced terminal sterilization services for the medical device and pharmaceutical markets. Terminal sterilization is the process of sterilizing a product in its final packaging.
The Company’s sterilization services rely on three primary technologies, one of which is Ethylene Oxide (“EtO”) processing. EtO processing is a gas sterilization process in which pallets of packaged goods are loaded into a chamber that is then injected with EtO gas to penetrate the packaging. That process emits toxic fumes which must be filtered before being released into the air. Sotera, through its Sterigenics business, conducts or has conducted EtO processing at facilities located in Illinois, California, Georgia, and New Mexico.
In August 2018, the EPA released the National Air Toxics Assessment (“NATA”) — a screening tool that estimates cancer risks based on emissions data in tens of thousands of census tracts across the United States. The NATA report revealed that people living in communities near Sterigenics’ facilities in Illinois, Georgia, and New Mexico had among the highest cancer rates in the country.
Beginning in September 2018, shortly after the publication of the EPA’s NATA report, cancer-stricken plaintiffs filed a surge of lawsuits in Illinois against Sotera, alleging that EtO emissions from the Company’s sterilization facility had caused their cancer.
On September 30, 2019, after significant pressure from the public and action taken against the Company by Illinois regulators, Sotera announced the closure of its Illinois facility. Beginning in August 2020, just months before the IPO, cancer-stricken plaintiffs living in proximity to a Sterigenics facility in Georgia filed lawsuits similar to those filed in Illinois.
On November 20, 2020, Sotera conducted its IPO, ultimately selling 53.59 million shares of common stock at $23 per share for gross proceeds of more than $1.2 billion. Months later, on March 18, 2021, the Company conducted the SPO, through which selling shareholders, including affiliates of Sotera’s private equity shareholders, Warburg Pincus LLC (“Warburg Pincus”) and GTCR, LLC (“GTCR”), as well as Sotera’s CEO, sold 25 million shares of Sotera common stock at $27 per share for $675 million in gross proceeds.
In the Offering Materials issued in connection with the Offerings, and throughout the Class Period, Sotera made numerous materially false and misleading representations concerning its emissions control systems and exposure to liability from lawsuits for the Company’s failure to limit harmful EtO emissions. The Company represented that it had “a proactive [environmental, health and safety] program and a culture of safety and quality.” In addition, Sotera stated that it employed adequate and effective safeguards to control EtO emissions. Moreover, Sotera and its executives vehemently denied allegations that the Company’s EtO emissions from its sterilization facilities caused cancer and other severe health issues in people living in the communities near those facilities.
These and similar statements made throughout the Class Period were false. In truth, Sotera and its senior executives and controlling shareholders knew, or at a minimum, recklessly disregarded, that for years the Company failed to employ effective emissions control systems to prevent the release of excessive amounts of toxic EtO gas from its sterilization facilities. Those deficiencies exposed people living in the surrounding communities to a significantly increased risk of cancer and subjected Sotera to an increased risk of liability from hundreds of EtO-related lawsuits. As a result of these misrepresentations, shares of Sotera stock traded at artificially inflated prices throughout the Class Period.
Investors began to learn the truth on September 19, 2022, when an Illinois state court jury in the first lawsuit arising from Sotera’s EtO emissions to go to trial, captioned Kamuda v. Sterigenics U.S., LLC, No. 18 L 10475 (Ill. Cir. Ct.) (“Kamuda”), found Sotera liable for the plaintiff’s cancer. Specifically, the jury awarded the plaintiff $363 million in damages, including $38 million in compensatory damages and $325 million in punitive damages. Of great significance for Sotera investors, the jury cited Sotera’s and Sterigenics’ “willful and wanton” misconduct in not preventing toxic EtO emissions and failing to warn about the severe health hazard posed by the Company’s Illinois facility. On this news, Sotera’s stock price declined by over 33%.
On September 20, 2022, analysts at Goldman Sachs downgraded Sotera stock, noting a significantly greater risk to Sotera in future EtO-related litigation due to facts that emerged in the Kamuda case and “possible bands of outcome being so open ended that it creates a material overhang on the stock for the foreseeable future.” Sotera stock fell approximately another 17%.
On September 21, 2022, analysts at JP Morgan downgraded Sotera stock after finding that “investors are likely to price in this unprecedented ruling as a higher probability of a larger settlement or subsequent payouts of the 700+ remaining individual lawsuits, which [Sotera] could potentially not afford.” This time, Sotera stock fell by over 10%.
If you wish to serve as lead plaintiff, you must move the Court no later than March 27, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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