Residents of New Jersey may have heard that a judge dismissed a shareholder lawsuit filed against BlackBerry Ltd. The dismissal came on March 13 and was issued by a federal judge on the U.S. District Court for the Southern District of New York.
Shareholders had filed a lawsuit against the Canadian company, alleging that the company had knowingly used inappropriate accounting practices while also giving misleading information about the reception of the company’s BlackBerry 10. The phone, released in an effort to regain market share lost to Apple’s iPhone and Samsung’s Android phones, failed to bring the desired results. Released in January 2013, disappointing sales led to a $930 million projected writedown, leading the stocks to drop one-sixth in value on Sept. 20, 2013.
In the court’s ruling, the judge stated the plaintiffs failed to prove any of their claims. The court stated that the phone had received positive reviews and so the company’s statement that people who had purchased it received it positively was not misleading. The court also indicated the plaintiffs failed to show the company knew its accounting practices were problematic. The company’s current CEO is refocusing BlackBerry towards the management of mobile devices and software applications.
Shareholder disputes may arise when a company’s shareholders believe the company has engaged in subterfuge in order to drive up its stock prices. Business transparency is key when a company has shareholders. Most businesses may find that seeking the help of a corporate law attorney may help them avoid the costs and time involved with potential litigation. The attorney may help by advising clients regarding required disclosures and other issues that could otherwise expose the company to lawsuits.
Source: Reuters, “BlackBerry wins dismissal of U.S. lawsuit over BlackBerry 10”, Jonathan Stempel and Euan Rocha, March 13, 2015.