A class action lawsuit has been filed against Revlon Inc, alleging that Revlon and certain of its officers, directors and controlling shareholders violated the federal securities laws by withholding material information from those persons who tendered their shares into Revlon's September 24, 2009 Exchange Offer, pursuant to which Revlon offered to exchange each outstanding share of its Class A common stock ("Common Stock") for one share of a newly issued series of Revlon Preferred Stock (the "Series A Preferred"). Following the October 8, 2009 consummation of the Exchange Offer, pursuant to which the members of the Class tendered 9,336,905 shares of Revlon Class A common stock for shares of Series A Preferred, Revlon announced stellar financial results for its quarter ended September 30, 2009 ("Third Quarter 2009") causing the Company's Common Stock price to rise by over 300%.
The complaint further alleges that despite the fact that the Exchange Offer closed only a week after Revlon's Third Quarter 2009, its stockholders were not provided with material information about the Company's expected positive results possessed by defendants. The tendering stockholders were entitled to receive such critical information before deciding whether to exchange their Common Stock. Plaintiff seeks damages on behalf of a class for the losses they suffered as a result of defendants' non-disclosure of material facts and breaches of their fiduciary duties. Plaintiff is seeking remedies under section 14(a) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), and Rule 14a-9 promulgated thereunder by the SEC, and under Delaware state law.
The case seeks to certify a class that includes all shareholders who tendered their shares for conversion to preferred stock pursuant to Revlon's Exchange Offer of September 24, 2009.