March 8, 2021 - The case was voluntarily dismissed.

April 6, 2020 - An investor, who sold shares of CVR Refining, LP (NYSE: CVRR), filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by CVR Refining, LP in connection with certain allegedly false and misleading statements made between July 30, 2018 through January 28, 2019.

Sugar Land, TX based CVR Refining, LP operates as an independent petroleum refiner and marketer of transportation fuels in the United States. Since formation, CVR Refining, LP’s business and operations have been run by its general partner, CVR Refining GP, LLC (the “General Partner”), which is indirectly owned by CVR Energy, Inc. CVR Refining, LP reported that its annual Total Revenue rose from over $4.43 billion in 2016 to over $5.66 billion in 2017 and that its Net Income increased from $15.30 million in 2016 to $88.80 million in 2017. Shares of CVR Refining, LP (NYSE: CVRR) declined from $25.75 per share in June 2018 to as low as $8.30 per share in December 2018.

On July 30, 2018, CVRR announced that the General Partner, CVI, and other affiliates now owned 84.5 percent of the outstanding CVR Refining, LP (NYSE: CVRR) common units, a sufficient amount to exercise the buyout provision in CVRR’s partnership agreement (the “Call Right”). Under the Call Right, CVR Refining GP, LLC had the right to acquire all remaining CVR Refining, LP (NYSE: CVRR) units for the greater of: (i) the 20-day trading average three days prior to notice of intent to effect the buyout; or (ii) the highest per-unit price paid by CVR Refining GP, LLC and/or affiliates for CVRR units during the 90-day period prior to notice of intent to effect the buyout. Despite CVR Refining GP, LLC’s ability to exercise this right, Defendants stated on August 1, 2018, that there were “no current plans to exercise the call right.” The plaintiff alleges that between July 30, 2018 through January 28, the defendants executed a allegedly fraudulent scheme to artificially depress the price of publicly traded CVR Refining, LP (NYSE: CVRR) units in order to acquire them for a substantial discount: (i) following the Exchange Offer, reduced public float and the threat of the Call Right began depressing the price of CVR Refining, LP (NYSE: CVRR) units, more than offsetting favorable financial results; (ii) as the price for CVRR units stagnated, and more than 90 days had passed since expiration of the Exchange Offer, Defendants announced that they were “considering” exercising the Call Right to further drive down the unit price; and (iii) once the price of CVRR units had substantially declined, Defendants exercised the Call Right, which price was based on the (manipulated) 20-day trading average of CVR Refining, LP (NYSE: CVRR) units.

On October 24, 2018, CVR Refining, LP (NYSE: CVRR) released its third quarter 2018 financial results, which results were up substantially from the year prior. What should have signaled lasting gains for CVRR, however, all but evaporated in a handful of trading days. This negative market sentiment reflected the reduced public float of CVRR units following the Exchange Offer, as well as the looming threat of the Call Right—despite assurances that there was “no intention” to exercise it.

CVR Refining GP, LLC announced on November 29, 2018 it was now “considering” exercising the Call Right, and that neither it, nor any of its affiliates, had purchased CVRR units in the 90-day period predating the announcement, further driving down the CVRR unit price.

Then, on January 17, 2019, CVRR issued a press release announcing CVR Refining GP, LLC had assigned the Call Right to CVI, and that CVI would exercise the Call Right on January 29, 2019, “for a cash purchase price of $10.50 per Common Unit,” which price was based on the 20-day trading average of CVR Refining, LP (NYSE: CVRR) units ending on January 14, 2018. The plaintiff alleges that to add a further layer to Defendants’ misconduct, an executive officer of CVR Refining GP, LLC, CVI, and CVRR, and therefore an affiliate of CVR Refining GP, LLC, had purchased CVR Refining, LP (NYSE: CVRR) units on November 14, 2018, at $16.71 per unit—well-within 90 days of CVI’s notice of intent to effect the buyout and that this transaction, which was only disclosed on January 15, 2019, purportedly due to “administrative error,” was all but ignored by Defendants. Therefore, pursuant to the terms of the Call Right, the Call Price should have been at minimum, $16.71.