Raser Technologiies, Inc.
Class Period: May 11, 2009 to Apr 29, 2011
Lead Plaintiff Deadline: Jan 29, 2012 + Deadline passed
Summary of Case:
A securities class action has been filed against Raser Technologies, Inc. ("Raser" or the "Company") on behalf of all persons who purchased or otherwise acquired Raser common stock between May 11, 2009 to April 29, 2011. This case has been filed in the USDC - Delaware.
The Complaint alleges that the Defendants failed to disclose material adverse facts regarding the Company's Thermo No. 1 geothermal plant. Unbeknownst to the investment community, soon after it was completed, the Thermo No. 1 geothermal plant evidenced material design deficiencies and use of inefficient recirculation pumps. In addition, heat transfer could not be implemented successfully because of an inadequate testing of well field temperature and an inadequate test of well flow prior to construction. As a result, by approximately June 2009, Defendants knew that the Thermo No. 1 geothermal plant could not raise its output above a net level of approximately 6.6 megawatts and, at this level, it was impossible for the Thermo No. 1 geothermal plant to operate at a profit or for the cost of the plant to be recovered through ongoing operations. Accordingly, for accounting purposes, the Thermo No. 1 geothermal plant was impaired.
Had Raser properly recognized its impairment losses throughout the Class Period: (i) Plaintiff and the Class would have been made aware of the fact that the Thermo No. 1 geothermal power plant was incapable of generating cash sufficient to recover its carrying value, and (ii) the Company's balance sheet would have reflected the fact that liabilities materially exceeded assets and that, accordingly, the Company was in a technical state of bankruptcy, which might have triggered adverse actions by Raser's creditors. Defendants' failure to disclose the existence of the design deficiencies that limited Thermo No. 1's output, and Defendants' material overstatement of the carrying value of Thermo No. 1, caused the market price of Raser's common stock to be artificially inflated during the Class Period.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.