NEW YORK—Two law firms have filed a securities class-action lawsuit against Cooper Tire & Rubber Co. on behalf of stockholders over the now-defunct merger deal with India's Apollo Tyres Ltd.
The suit claims Cooper and some of its senior executives violated federal securities laws by allegedly issuing misleading statements and omissions during its failed buyout by Apollo last year.
Law firms Entwistle & Cappucci L.L.P. and Bernstein Litowitz Berger & Grossmann L.L.P. announced they have filed the lawsuit against Findlay, Ohio-based Cooper Tire, CEO Roy Armes and CFO Bradley Hughes in the U.S. District Court for the District of Delaware. The plaintiffs include all purchasers of Cooper's publicly traded stock from June 12, 2013, through Nov. 8, 2013, inclusive, and all Cooper shareholders who held shares as of the record date of Aug. 30, 2013, and were entitled to vote with respect to the proposed merger between Cooper and Apollo, the firms said.
The lawsuit alleges Cooper falsely represented the significant risks associated with the merger by concealing the fact that the company lacked control over its joint venture manufacturing facility in China, Cooper Chengshan Tire Co. Ltd. The plant was a major stumbling block in the merger negotiations after striking workers at the plant and the minority owner, Chengshan Group, reportedly blocked the tire companies from entering the plant or accessing financial information.
The lawsuit alleges Cooper concealed the fact that Chengshan Group—which holds a 35 percent interest in CCT—opposed the merger and had, in fact, sought to acquire Cooper for itself.
Cooper recently announced that the CCT facility would begin ramping up for production and that the joint venture operation would soon resume financial reporting.