An Heckmann investor filed a lawsuit on behalf of all persons or entities (1) who held shares of Heckmann Corporation (HEK) as of September 15, 2008 and were eligible to vote at its special meeting held on October 30, 2008 with respect to its acquisition of China Water and Drinks, Inc. and (2) who purchased or otherwise acquired Heckmann securities between October 2, 2008 and May 8, 2009, excluding any securities of Heckmann acquired in exchange for securities of China Water pursuant to the Merger. Meanwhile an investigation on behalf of current long term investors in Heckmann Corporation (NYSE:HEK), was announced.

Heckmann Corporation, located in Palm Desert, California, was created to buy and build companies in the water sector. On May 20, 2008, Heckmann Corporation announced that it had entered into an agreement to acquire China Water for an aggregate purchase price of $625 million. In order to consummate the Merger - which required the vote of the majority of Heckmann's public stockholders - Heckmann Corporation issued a Joint Proxy on October 2, 2008 which solicited the approval of Heckmann's stockholders of the transaction.

According to the complaint filed in the United States District Court for the District of Delaware the plaintiff alleges that Heckmann Corp. and certain of its directors and officers violated the Securities Exchange Act of 1934. In particular the plaintiff alleges that the China Water Joint Proxy from October 2, 2008 contained material misstatements and omitted material information. The Defendants recommended that shareholders approve the transaction because China Water was as an attractive acquisition target that would provide Heckmann stockholders 'with an opportunity to merge with, and participate in, a company with significant growth potential', so the lawsuit.

In support of this recommendation, the Joint Proxy contained detailed reported, pro forma and projected financial data for Heckmann and China Water which was purportedly the product of Heckmann's 'extensive due diligence review of China Water and its business and operations.' These statements were materially misleading and omitted material information regarding the value of China Water's assets and its financial condition. As a result of the material misstatements and omissions in the Joint Proxy, the Merger was overwhelmingly approved by Heckmanns stockholders.

Investors began learning about the true financial condition of China Water beginning on May 8, 2009, so the lawsuit, when Heckmann disclosed financial results for the first quarter of 2009 and disclosed that the Company had recorded a net loss for the first quarter of $186.2 million, or $1.69 per share, which included a $184.0 million non-cash goodwill impairment charge associated with the assets of China Water. Shares of Heckmann (HEK) traded recently at $5.47 per share, down from its 52weekHigh of $6.48 per share, and over $10 per share in 2008. Heckmann Corporation responded with a press release saying that it believes that the allegations in the lawsuit lack merit and that it intends to vigorously defend the lawsuit.