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Cases & Deals

March 8, 2019

Jack Cooper Holdings and Officers Win Dismissal With Prejudice

On March 8, 2019, King & Spalding won the dismissal with prejudice of a Section 10(b) securities fraud complaint against automotive transportation and logistics provider Jack Cooper Holdings Corp. and two of its officers in River Birch Capital, LLC v. Jack Cooper Holdings Corp., in the Southern District of New York.  Plaintiff, a hedge fund that allegedly purchased $28 million in Jack Cooper’s senior secured notes, claimed that defendants misstated certain risks of Jack Cooper’s business and failed to disclose details regarding its customer relationships.  Judge William Pauley of the Southern District of New York held that plaintiff failed to plead either that Jack Cooper or its officers made any material misstatements or omissions or that any of the defendants had scienter.  This early result achieved by King & Spalding not only dismissed the case against Jack Cooper Holdings Corp., its CEO and President T. Michael Riggs and former CFO Michael Testman, but also denied River Birch the opportunity to file another amended complaint.