The Department of the Treasury of the State of New Jersey and its Division of Investment v. Cliffs Natural Resources Inc.
| Court: | United States District Court for the Northern District of Ohio |
| Case Number: | 14-cv-01031 |
| Class Period: | 03/14/2012 - 03/26/2013 |
| Case Leaders: | James A. Harrod, Jeremy P. Robinson, Rebecca E. Boon |
Background
On May 12, 2014, BLB&G filed a securities class action lawsuit on behalf of the Department of the Treasury of the State of New Jersey and its Division of Investment against Cliffs Natural Resources Inc. (“Cliffs” or the “Company”) (NYSE: CLF) and certain of its senior executives. The action, which is captioned The Department of the Treasury of the State of New Jersey and Its Division of Investment v. Cliffs Natural Resources Inc., Case No. 1:14-cv-01031 (N.D. Ohio), asserts claims under the Securities Exchange Act of 1934 on behalf of investors in Cliffs common stock during the period from March 14, 2012 through March 26, 2013, inclusive (the “Class Period”).
The Complaint alleges that during the Class Period, Cliffs misrepresented to investors that one of its most important assets, an iron ore mine known as Bloom Lake, was a premium asset and that production at the mine could be increased even as production costs decreased. Defendants also repeatedly misled investors regarding the testing and sustainability of the Company’s dividend, which Cliffs dramatically increased by 123% on the first day of the Class Period. Once investors learned the complete truth regarding the massive problems at Bloom Lake and that the Company’s dividend was neither adequately tested nor sustainable, the price of Cliffs common stock dropped significantly, damaging plaintiff and the class.
The Department of the Treasury of the State of New Jersey was appointed Lead Plaintiff on July 23, 2014. Lead Plaintiff filed a Second Amended Complaint on March 31, 2015.
On May 15, 2015, Defendants moved to dismiss the Second Amended Complaint. Lead Plaintiff filed a brief in opposition to Defendants' motion to dismiss on June 12, 2015. On November 6, 2015, the Court issued an Opinion and Order denying Defendants’ motion to dismiss.
Lead Plaintiff Reaches a Settlement of the Action
On June 30, 2016, the Court granted final approval of the settlement of this Action reached by the Court-appointed Lead Plaintiff, The Department of the Treasury of the State of New Jersey and its Division of Investment, on behalf of itself and the other members of the Settlement Class, with defendants Terrance Paradie, Joseph Carrabba, Laurie Brlas, and David Blake (the “Settlement”). The Settlement provides for a payment of $84,000,000 in cash, and resolves all claims asserted in the Action.
The Settlement Class consists of:
All persons and entities who or which purchased Cliffs common stock from March 14, 2012 through March 26, 2013, inclusive, and were damaged thereby, except for certain persons and entities who are excluded from the Settlement Class by definition (see paragraph 29 of the Settlement Notice) or pursuant to request.
The claims administration process has concluded and the net settlement fund has been fully disbursed. This matter is considered closed.