Last year, Meredith Corporation acquired Time Inc., the publisher of People, Time, Fortune, and many other magazines. The purchase price was $2.8 billion. The expectation was that this acquisition would bring substantial profits to Meredith. This has not been the case.
There are at least 10 law firms that have filed class action lawsuits against Meredith Corporation due to the company allegedly withholding information from the stockholders, lying about its earnings, and not conducting proper due diligence.
The following law firms have filed their class actions: Rosen Law Firm, Pawar Law Group, The Schall Law Firm, Bernstein Liebhard LLP, Bronstein, Gewirtz & Grossman, LLC, Gainey McKenna & Egleston, Ademi & O’Reilly LLP, Glancy Prongay & Murray, Robbins Geller Rudman & Dowd LLP, Bragar Eagel & Squire, P.C. (Click on the hyperlinks to see the law firm's official announcements)
These law firms allege that Meredith mis-properly conducted business and needs to be held accountable for the damages caused to its investors. Each law firm has similar reasons as to why they are filing the class action. In summary, this is what they had to say:
- Meredith Corporation has failed to disclose how profitable the acquisition of Time Inc. really was.
- Meredith did not realize that Time Inc.’s advertising department was tanking.
- Meredith did not complete proper due diligence before the purchase.
- Meredith’s profits were millions of dollars lower than what the analysts had initially projected for 2019 because they had to invest an immense amount of money into Time Inc.
- Meredith’s profits contradicted what they had publicly voiced. This had misled their stockholders into believing the company was still generating a substantial amount of profits from this acquisition.
For years, it has been known that Time Inc. was facing many issues. Advertising had been declining and there have been significant management changes, staff layoffs, tanking stock price, etc. Besides this, print media, in general, has been in a state of decline. The law firms' claims do not seem to take into account the well known declining trends of the print media industry and Time Inc in particular.
Stay tuned for more information about this class action!