July 21, 2020 - An investor in shares of McDermott International, Inc. (NYSE: MDR) (OTC: MDRIQ) filed a lawsuit in the U.S. District Court for the District Court for the Southern District of Texas over alleged violations of Federal Securities Laws by McDermott International, Inc. in connection with certain allegedly false and misleading statements made between September 20, 2019 and January 23, 2020.

Houston, TX based McDermott International, Inc. provides engineering, procurement, construction and installation, front-end engineering and design, and module fabrication services for upstream field developments. McDermott International, Inc. reported that its annual Total Revenue rose from over $6.7 billion in 2018 to over $8.43 billion in 2019 and that its Net Loss increased from over $2.68 billion in 2018 to over $2.9 billion in 2019.

On September 20, 2019, McDermott International, Inc announced its recent receipt of unsolicited approaches to acquire Lummus Technology, McDermott's industry leading technology business with a valuation exceeding $2.5 billion. McDermott International, Inc told investors that it was exploring strategic alternatives to unlock the value of Lummus Technology, that the process of exploring strategic alternatives is part of our ongoing efforts intended to improve McDermott's capital structure, and we plan to use the proceeds from any transaction involving Lummus Technology to strengthen our balance sheet.

The plaintiff alleges that the disclosures were materially misleading. The plaintiff claims that there was not any plan for a near-term sale of Lummus Technology to strengthen McDermott's balance sheet and that the disclosures were made as part of a scheme to artificially inflate the market price of McDermott's common stock, calm the market and allow the Company to negotiate a prepackaged Chapter 11 bankruptcy restructuring plan.
On January 21, 2020, McDermott announced its entry of a Restructuring Support Agreement in connection with a Joint Prepackaged Chapter 11 Plan of Reorganization. After the announcement, trading of McDermott common stock was halted.

Once trading resumed, shares of McDermott International, Inc. (NYSE: MDR) (OTC: MDRIQ) declined to $0.0141 per share on January 23, 2020, respectively $0.01 per share on May 20, 2020.

According to the complaint the plaintiff alleges on behalf of purchasers of McDermott International, Inc. (NYSE: MDR) (OTC: MDRIQ) common shares between September 20, 2019 and January 23, 2020, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between September 20, 2019 and January 23, 2020, the defendants violated the federal securities laws by failing to disclose that they knowingly and/or recklessly made, and caused McDermott to make, materially false and misleading statements, and/or omit material facts regarding the sale of Lummus Technology, an asset of McDermott. These statements were made with the intent to conceal the acute liquidity crisis McDermott actually faced, to provide the Company time to prepare a prepackaged plan of reorganization with its secured lenders and other stakeholders, and to avoid a freefall Chapter 11 filing.