In re REV Group, Inc. Securities Litigation
Bernstein Liebhard Announces Preliminary Approval of $14.25 Million Class Action Settlement Involving REV Group, Inc.
Bernstein Liebhard is lead counsel representing the lead plaintiff, Houston Municipal Employees Pension System (“HMEPS”), in a securities class action entitled In re REV Group, Inc. Securities Litigation, Lead Case No. 2:18-cv-1268-LA (E.D. Wis.) alleging violations of Section 11 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 on behalf of those who acquired the common stock of REV Group, Inc. (“REVG” or the “Company”) between January 26, 2017 and June 7, 2018 (the “Relevant Period”). Plaintiffs allege that defendants REVG, certain executive officers, and the underwriters of REVG’s public offerings issued false and misleading statements concerning the Company’s margin growth in REVG’s registration statements, and subsequently issued earnings guidance for fiscal year 2018 that defendants knew was unreachable.
On March 7, 2018, REVG announced 1Q18 financial results. REVG surprised the market by revealing that its margins and growth rates had contracted for the first time since its IPO five quarters prior. REVG stated that the margin contraction was a result of poor product mix and poor timing of shipments. By this disclosure, REVG began to reveal that its growth was slowing. After the March 7, 2018 announcement, REVG stock fell on March 8, 2018 by 12%.
At the end of the Class Period, defendants substantially revised the Company’s prior guidance, reporting Adjusted EBITDA for 2Q18 that was 25% below analysts’ estimates of $45 million. The Company also reduced fiscal year 2018 net income by approximately 20% and Adjusted EBITDA by approximately 15%. These revelations caused the price of REV Group stock to drop 20%, causing further damages to investors.
After Plaintiffs filed a second amended complaint, defendants sought to dismiss the action. HMEPS filed a detailed opposition to defendants’ motion to dismiss and the motion was fully briefed. While the motion was pending, the parties entered into lengthy settlement discussions. Ultimately, Bernstein Liebhard and State Class Counsel successfully negotiated a $14.25 million settlement to resolve all Section 11 and 10(b) claims involving REV Group common stock acquired during the Relevant Period.
On August 24, 2021, the Court preliminarily approved the Settlement. The Court also appointed JND Legal Administration as the claims administrator for the settlement classes. If you purchased REV Group common stock during the Relevant Period, more information about how to submit a claim, the settlement, and settlement class members’ rights can be found at the website: