Rayonier hit with shareholder class action

The Oklahoma Firefighters Pension and Retirement System and other class members are suing Rayonier Advanced Materials Inc., Paul G. Boynton, Frank A. Ruperto and Benson K. Woo in a lawsuit filed on April 30 in U.S. District Court for the Middle District of Florida.

U.S. District Court for the Middle District of Florida in Jacksonville

The class action concerns all those who received stock from Rayonier Advanced Materials (RYAM) between June 30 and Jan. 28.

On Jan. 27. 2014, the lawsuit states, RYAM went public to spin off its Performance Fibers Division into a separate, publicly traded companies.

Then, that November, RYAM said that it had incorrectly included in its merchantable timber inventory parcels of land that were specially designated, environmentally protected or otherwise restricted, the suit states.

Rayonier’s depletion expenses were understated during the periods listed, and Rayonier also admitted material weakness in its internal controls regarding merchantable timber inventory, the suit states.

As a result, the lawsuit states, RYAM stock dipped from $27.57 per share to $25.06, and two months later, the company announced it was “making massive adjustments to its environmental reserves.”

Stock continued to fall.

RYAM has incurred about $950 million of new debt to separate the division into a independent company. And, the lawsuit alleges, “RYAM knowingly and/or recklessly made misleading and false statements so that it could effectuate the separation and raise borrowings in amounts and on terms that it otherwise would not have been able to receive.”

The action seeks affirmation from the court; unspecified damages; pre- and post-judgment interest; attorneys’ fees; and court costs.

The plaintiff is represented by attorneys Joseph E. White III and Lester R. Hooker of Boca Raton, Fla.

U.S. District Court for the Middle District of Florida case no. 3:15-cv-00546