Updated: November 1, 2018
Status: Ongoing Case
On February 21, 2017, Labaton Sucharow was appointed lead counsel for the lead plaintiffs in a securities class action against StoneMor Partners LP (StoneMor), a death-care company, certain related entities, and certain of StoneMor’s officers and directors.
The lead plaintiffs allege that StoneMor and the other defendants made false and misleading statements, and concealed material facts regarding the source of the company’s cash distributions to unitholders. Specifically, the lead plaintiff alleges that the defendants used misleading non-GAAP accounting methodology to give the appearance that cash distributions were being made from organic revenue, while in reality these distributions were being funded by and were contingent on access to proceeds of equity sales. When the company’s ability to sell additional equity was curtailed in the fall of 2016, StoneMor was forced to cut its cash distribution by 50 percent, causing injury to investors when the price per unit to dropped precipitously.
In November 2017, the district court granted the defendants’ motion to dismiss, which plaintiffs appealed to the Third Circuit. The appeal has been fully briefed and argued.
The case is Anderson v. StoneMor Partners LP, No. 16-cv-6111 (E.D. Pa.). Labaton Sucharow represents lead plaintiffs Peter Fan, Royal Estate Management, LLC, and Fremont Hotel, Inc. (collectively, the Fremont Investor Group). The defendants are StoneMor Partners LP; Robert B. Hellman (member of StoneMor’s Board of Directors); Lawrence R. Miller (StoneMor’s CEO and chairman of the Board of Directors); William R. Shane (former StoneMor CFO); Timothy Yost (former StoneMor CFO); Sean P. McGrath (former StoneMor CFO); American Cemeteries Infrastructure Investors, LLC (a related entity); StoneMor GP Holdings, LLC (a related entity); and StoneMor GP, LLC (a related entity).