A complaint has been filed on behalf of all people who purchased common stock in a renewable resources company following allegations that it, as well as its executives, breached federal securities laws regarding the nature of its disclosures on operations, prospects and business.
The class action suit, filed by a law firm in the Central District of California, was initiated on behalf of investors who purchased shares in Cadiz Inc. during the class period between March 10, 2014 through April 21, 2015. The company is involved in a number of renewable resource projects nationwide. Cadiz’ projects touch upon land and water use, as well as agriculture. The California-based company owns 9,600 acres zoned specifically for agricultural purposes. These lands are kept up using sustainable agriculture practices, and crops include lemons and dried-on-the-vine raisins. A substantial portion of what is grown on the land owned by the organization in the Cadiz Valley is organic.
“The conservation project landed the company in hot water.”
Cadiz also uses its land to explore solar power and permanent conservation opportunities. The company is dedicated to creating a new renewable source of water for Californians. Through the Cadiz Valley Water Conservation, Recovery and Storage Project, the firm works to conserve water that would evaporate if left alone, in an effort to build a reliable and sustainable water supply for California. This project has also explored storing groundwater supplies and importing surplus water. The initiative is the largest of Cadiz’ sustainability campaigns, and is based at its Cadiz Valley site. The conservation project is also what landed the company in hot water.
The class action suit against Cadiz alleges that the company made misleading statements and/or failed to disclose that the Bureau of Land Management had decided that the Cadiz Valley Water Conservation, Recovery and Storage Project did not meet “railroad purpose,” a requirement for using an existing right-of-way on government land. Companies that don’t meet railroad purpose must work with the agency to acquire authorization under the Federal Land Management and Policy Act or the Mineral Leasing Act. The BLM determined that, under the 2012 Consolidated Appropriations Act, Cadiz’ project had become unviable, another fact the company allegedly failed to disclose.
The first law firm previously discussed was not the only practice to file a claim against the renewable resources firm. A second and third group have both issued their own calls for Cadiz investors to step forward and join the suit against the company. Investors have until June 23 to join the class action lawsuit against Cadiz. On April 21, 2015, SeekingAlpha.com published a report explaining that in a letter dated July 12, 2013, the company acknowledged that the Cadiz Valley Water Conservation, Recovery and Storage Project did not meet railroad purpose. Additionally, the report explained that Cadiz was nearing bankruptcy. On this news, the price of the company’s stock fell by $0.72 per share, or more than 7 percent, to close $8.98 on April 21, 2015.
For more information on this case or other class action litigations, please contact Kevin Doyle, Senior Vice President, at 203-987-4949 or info@battea.com.