Adient, a global leader in automotive seating manufacturing, its CFO Jeffrey Stafeil and its former-CEO Bruce McDonald won a complete victory in a putative securities fraud class action seeking massive damages in Manhattan federal court. Southern District of New York Judge Ronnie Abrams dismissed all claims against all defendants in an action brought by purchasers of Adient stock who claimed that they were damaged as a result of defendants’ alleged false statements to the market about the company’s plans to improve certain aspects of its business and expand its profit margin.
The court adopted virtually every argument that the S&C team made on Adient’s behalf, dismissing each of Plaintiffs’ claims, including that Plaintiffs failed to allege that any defendant made a false statement, let alone acted with scienter, and that many of the alleged misstatements constitute inactionable forward-looking statements, accompanied by cautionary language, inactionable statements of opinion, and inactionable puffery.
The across-the-board win was particularly noteworthy given that plaintiffs had located and relied heavily upon statements of seven former-employee confidential witnesses, who plaintiffs quoted liberally in their pleadings to try to support their claims. In securing dismissal, S&C explained, both in its papers and during a 90-minute hearing that Matthew Porpora argued for defendants, that the confidential witnesses myriad criticisms of Adient’s business and their complaints that certain projections ultimately did not come to fruition do not show that any defendant ever made a single statement that he knew to be false at the time it was made or that any defendant ever made a single statement with the intent to mislead the market.
The S&C team is led by Jeff Scott and Matthew Porpora.