Abengoa of Spain obtains the dismissal of the lawsuit of an American shareholder alleging fraud
By Jonathan Stempel
NEW YORK (Reuters) – A U.S. judge on Tuesday dismissed a lawsuit by shareholders of Abengoa SA accusing the Spanish engineering and energy company of committing massive accounting fraud between 2013 and 2015 that masked a crisis liquidity and resulted in bankruptcy.
U.S. District Judge Edgardo Ramos in Manhattan dismissed allegations, including from a whistleblower, that Abengoa routinely inflated profit margins and prematurely recognized contract revenue in order to boost executive bonuses.
In a 56-page decision, Ramos said Abengoa did not mislead shareholders by publicly touting its “strict financial discipline”, and said receipt of performance-based bonuses did not in itself establish motive. of fraud.
He also said shareholders waited too long to sue Bank of America, Canaccord Genuity, HSBC and Societe Generale, which helped Abengoa sell 517.5 million euros ($518 million) of U.S. depositary stock in October 2013.
The lawsuit targeted investors who purchased Abengoa’s ADSs between October 17, 2013 and August 2, 2015, the day before Abengoa surprised the market seeking a capital increase. Its market value plummeted by around $8.1 billion over the next two days.
Nicholas Porritt, an attorney for the investors, said they were “obviously disappointed” and are reviewing the decision to determine their next steps.
Abengoa and his attorneys did not immediately respond to requests for comment.
The company filed for protection under Spanish insolvency law in November 2015 and filed for protection under Chapter 15 of the US Bankruptcy Code four months later.
Both procedures ended in 2019.
Abengoa, excluding its main unit, renewed voluntary bankruptcy proceedings in February 2021, after creditors refused to extend talks on a restructuring deal.
The Seville-based company had borrowed heavily for more than a decade to aggressively expand into renewables.
In June 2022, Abengoa began insolvency proceedings for the main unit, after Spain rejected an aid package that would have given the unit more time to assess a takeover bid from the private equity firm TerraMar Capital LLC.
The case is Francisco v. Abengoa SA, US District Court, Southern District of New York, No. 15-06279.
(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)