A publicly traded RV retailer based in Illinois reached a $12.5 million settlement with shareholders who alleged the company made false statements to artificially inflate its stock price.
The agreement between Camping World Holdings Inc., its current and former executives and the class of plaintiffs, which includes four state pension funds, was filed Thursday in Chicago federal court.
It is subject to approval by Chief U.S. District Judge Rebecca R. Pallmeyer.
Camping World Inc., a RV and outdoor supply company based in Lincolnshire, filed its initial public offering in October 2016 and secondary offerings around May 2017 and October 2017. The company’s stock was issued at $22 per share, increased to $40 per share and now trades at less than $10 a share.
The initial complaint, filed in late 2018, maintained Camping World alleged violations of the Securities Exchange Act. The plaintiffs accused the company of making several false and misleading statements and profiting from those statements by selling Camping World stock at inflated prices.
Camping World denies all the allegations as part of the settlement agreement.
James E. Barz of Robbins Geller Rudman & Dowd LLP is one of the attorneys representing the plaintiff class.
“We believe it is a good result, and we were pleased to reach a settlement early in the litigation that will provide a faster recovery for investors,” Barz said in an email.
The settlement agreement defines the class as anyone who purchased or acquired Camping World publicly traded stock during the period from Oct. 6, 2016 through Aug. 7, 2018, and/or in the company’s secondary offerings and who were allegedly damaged by defendants’ alleged conduct.
Barz said potential class members have an opportunity to object, exclude themselves or decide to be part of the settlement.
The complaint alleged that Camping World and its officers “made false and misleading statements regarding the [c]ompany’s financial performance, the effectiveness of internal controls to ensure accurate financial reporting and the success and profitability of the integration and rollout of Gander Mountain stores that the [c]ompany had recently acquired out of bankruptcy.”
The plaintiffs claimed the company’s drastic decline in its stock price — from roughly $40 a share to less than $10 a share — resulted from the company’s false and misleading statements that were subsequently exposed.
“Lead [p]laintiffs and [l]ead [c]ounsel believe that the claims asserted in the [a]ction have merit,” the settlement agreement states. “But [l]ead [p]laintiffs and [l]ead [c]ounsel recognize and acknowledge the expense and length of continued proceedings necessary to prosecute the [a]ction against [d]efendants through trial and through appeals.”
The plaintiffs are also represented by Brian E. Cochran and Frank A. Richter of Robbins Geller Rudman & Dowd and Michael Canty of Labaton Sucharow LLP in New York.
Defendants are represented by Eric R. Swibel of Latham & Watkins LLP.
Swibel did not respond to a request for comment.
This case is David Ronge v. Camping World Inc, et al., No. 18 C 7030.