Case No.: DRAFT Behalf of All Others Similarly Situated, CLASS … · 2016-06-05 · the chemours...

CLASS ACTION COMPLAINT

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

________________, Individually and On

Behalf of All Others Similarly Situated,

Plaintiff,

v.

THE CHEMOURS COMPANY, E. I. DU

PONT DE NEMOURS AND COMPANY,

MARK VERGNANO, and MARK

NEWMAN,

Defendants.

Case No.: DRAFT

CLASS ACTION COMPLAINT FOR

VIOLATIONS OF THE FEDERAL

SECURITIES LAWS

JURY TRIAL DEMANDED

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Plaintiff _________ (“Plaintiff”), by and through his attorneys, alleges the following

upon information and belief, except as to those allegations concerning Plaintiff, which are

alleged upon personal knowledge. Plaintiff’s information and belief is based upon, among other

things, his counsel’s investigation, which includes without limitation: (a) review and analysis of

regulatory filings made by The Chemours Company (“Chemours” or the “Company”), with the

United States (“U.S.”) Securities and Exchange Commission (“SEC”); (b) review and analysis of

press releases and media reports issued by and disseminated by Chemours; and (c) review of

other publicly available information concerning Chemours.

NATURE OF THE ACTION AND OVERVIEW

1. This is a class action on behalf of persons or entities that acquired Chemours

securities between June 19, 2015 and June 2, 2016, inclusive (the “Class Period”), seeking to

pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”).

2. Chemours is a provider of performance chemicals and has three reporting

segments: Titanium Technologies, Fluoroproducts, and Chemical Solutions. The Titanium

Technologies segment produces titanium dioxide (TiO2), a premium white pigment used to

deliver whiteness, brightness, opacity and protection in a variety of applications. The

Fluoroproducts segment provides fluoroproducts, such as refrigerants and industrial

fluoropolymer resins. Finally, the Chemical Solutions segment is a provider of industrial and

specialty chemicals used in gold production, oil refining, agriculture, industrial polymers, and

other industries.

3. Chemours was created through a separation from E. I. du Pont de Nemours and

Company (“DuPont”). Chemours consists of DuPont’s former Performance Chemicals reporting

segment, and certain other assets and liabilities which formerly belonged to DuPont. The

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separation was completed by way of a distribution of all of the then-outstanding shares of

common stock of Chemours to holders of DuPont common stock.

4. On June 2, 2016, Citron Research published a report on Chemours demonstrating

that Chemours is a business “designed for bankruptcy.” The report disclosed that Chemours is

potentially subject to massive liabilities relating to its manufacturing of C8—also known as

PFOA—and that DuPont created Chemours to distance DuPont from the potential environmental

liability. The report also pointed out that the Company was over-leveraged with nearly $4 billion

in debt on its books.

5. On this news, Chemours stock price fell $0.41 per share, or more than 4.6%, to

close at $8.25 per share on June 3, 2016, on unusually heavy trading volume.

6. Throughout the Class Period, Defendants made false and/or misleading

statements, as well as failed to disclose material adverse facts about the Company’s business,

operations, and prospects. Specifically, Defendants made false and/or misleading statements

and/or failed to disclose: (1) that Chemours is potentially subject to massive liabilities relating to

its manufacturing of C8—also known as PFOA; (2) that DuPont created Chemours to distance

DuPont from the potential environmental liability; (3) that, as such, Chemours is a company

“designed for bankruptcy”; and (4) that, as a result of the foregoing, Defendants’ statements

about Chemours’ business, operations, and prospects, were false and misleading and/or lacked a

reasonable basis.

7. As a result of Defendants’ wrongful acts and omissions, and the precipitous

decline in the market value of the Company’s securities, Plaintiff and other Class members have

suffered significant losses and damages.

JURISDICTION AND VENUE

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8. The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange

Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17

C.F.R. § 240.10b-5).

9. This Court has jurisdiction over the subject matter of this action pursuant to 28

U.S.C. §1331 and Section 27 of the Exchange Act (15 U.S.C. § 78aa).

10. Venue is proper in this Judicial District pursuant to 28 U.S.C. § 1391(b) and

Section 27 of the Exchange Act (15 U.S.C. § 78aa(c)). Substantial acts in furtherance of the

alleged fraud or the effects of the fraud have occurred in this Judicial District. Many of the acts

charged herein, including the dissemination of materially false and/or misleading information,

occurred in substantial part in this Judicial District. In addition, the Company’s shares are

actively traded within this Judicial District.

11. In connection with the acts, transactions, and conduct alleged herein, Defendants

directly and indirectly used the means and instrumentalities of interstate commerce, including the

United States mail, interstate telephone communications, and the facilities of a national securities

exchange.

PARTIES

12. Plaintiff ___________, as set forth in the accompanying certification,

incorporated by reference herein, purchased Chemours securities during the Class Period, and

suffered damages as a result of the federal securities law violations and false and/or misleading

statements and/or material omissions alleged herein.

13. Defendant Chemours is a Delaware corporation with its principal executive

offices located at 1007 Market Street, Wilmington, Delaware 19899.

14. Defendant E. I. du Pont de Nemours and Company (DuPont) is a Delaware

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corporation with its principal executive offices located at 974 Centre Road Wilmington,

Delaware 19805.

15. Defendant Mark Vergnano (“Vergnano”) was, at all relevant times, Chief

Executive Officer (“CEO”) of Chemours.

16. Defendant Mark Newman (“Newman”) was, at all relevant times, Chief Financial

Officer (“CFO”) of Chemours.

17. Defendants Vergnano and Newman are collectively referred to hereinafter as the

“Individual Defendants.” The Individual Defendants, because of their positions with the

Company, possessed the power and authority to control the contents of Chemours’ reports to the

SEC, press releases and presentations to securities analysts, money and portfolio managers and

institutional investors, i.e., the market. Each defendant was provided with copies of the

Company’s reports and press releases alleged herein to be misleading prior to, or shortly after,

their issuance and had the ability and opportunity to prevent their issuance or cause them to be

corrected. Because of their positions and access to material non-public information available to

them, each of these defendants knew that the adverse facts specified herein had not been

disclosed to, and were being concealed from, the public, and that the positive representations

which were being made were then materially false and/or misleading. The Individual

Defendants are liable for the false statements pleaded herein, as those statements were each

“group-published” information, the result of the collective actions of the Individual Defendants.

SUBSTANTIVE ALLEGATIONS

Background

18. Chemours is a provider of performance chemicals and has three reporting

segments: Titanium Technologies, Fluoroproducts, and Chemical Solutions. The Titanium

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Technologies segment produces titanium dioxide (TiO2), a premium white pigment used to

deliver whiteness, brightness, opacity and protection in a variety of applications. The

Fluoroproducts segment provides fluoroproducts, such as refrigerants and industrial

fluoropolymer resins. Finally, the Chemical Solutions segment is a provider of industrial and

specialty chemicals used in gold production, oil refining, agriculture, industrial polymers, and

other industries.

19. Chemours was created through a separation from DuPont. Chemours consists of

DuPont’s former Performance Chemicals reporting segment, and certain other assets and

liabilities which formerly belonged to DuPont. The separation was completed by way of a

distribution of all of the then-outstanding shares of common stock of Chemours to holders of

DuPont common stock.

Materially False and Misleading

Statements Issued During the Class Period

20. The Class Period begins on June 19, 2015. On that day, Chemours issued a press

release entitled, “DuPont Announces ‘When-Issued’ Trading of The Chemours Company

Common Stock in Connection with Planned Spin-Off.” Therein, the Company, in relevant part,

stated:

WILMINGTON, Del., June 19, 2015 – DuPont announced that, in connection

with the separation of its Performance Chemicals segment through the planned

spin-off of The Chemours Company (“Chemours”) on July 1, 2015, Chemours

common stock will today begin “when-issued” trading on the New York Stock

Exchange under the ticker symbol “CC WI”.

Chemours, a global leader in titanium technologies, fluoroproducts and chemical

solutions, is expected to begin “regular way” trading on the New York Stock

Exchange under the ticker symbol “CC” on July 1, 2015.

As previously announced, on June 5, 2015, the DuPont board of directors

declared a pro rata dividend to DuPont common stockholders of record as of 5:00

p.m. ET on June 23, 2015, the record date. As a result, on July 1, 2015, DuPont

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common stockholders will receive one share of common stock of Chemours for

every five shares of DuPont common stock they hold on the record date.

Fractional shares of Chemours common stock will not be distributed to DuPont

common stockholders. Instead, the fractional shares of Chemours common stock

will be aggregated and sold in the open market, with the net proceeds distributed

pro rata in cash payments to the DuPont common stockholders who otherwise

would have received fractional shares of Chemours common stock.

No action is required by DuPont common stockholders to receive the distributed

shares of Chemours common stock. DuPont stockholders who hold DuPont

common stock on the record date and do not sell those shares “regular-way” prior

to the distribution date will receive a book-entry account statement reflecting their

ownership of Chemours common stock or their brokerage account will be credited

with Chemours shares. An Information Statement containing details regarding the

distribution of Chemours common stock and Chemours’ business and

management following the consummation of the distribution will be mailed to

DuPont common stockholders prior to the distribution date.

For U.S. federal income tax purposes, DuPont U.S. common stockholders (other

than those subject to special rules) generally should not recognize gain or loss as a

result of the distribution, except with respect to cash received in lieu of fractional

shares of Chemours. DuPont common stockholders are urged to consult with their

tax advisors with respect to the U.S. federal, state and local or foreign tax

consequences, as applicable, of the distribution.

The Chemours Company is a global leader in titanium technologies,

fluoroproducts and chemical solutions, providing its customers in a wide range of

industries with market-defining products, application expertise and, chemistry-

based innovations. Chemours ingredients are found in plastics and coatings,

refrigeration and air conditioning, mining and oil refining operations and general

industrial manufacturing. Our flagship products include prominent brands such as

Teflon®, Ti-Pure

®, Krytox

®, Viton

®, Opteon

® and Nafion

®. Chemours has

approximately 9,000 employees across 37 manufacturing sites serving more than

5,000 customers in North America, Latin America, Asia-Pacific and Europe.

Chemours is headquartered in Wilmington, Del.

DuPont (NYSE: DD) has been bringing world-class science and engineering to

the global marketplace in the form of innovative products, materials, and services

since 1802. The company believes that by collaborating with customers,

governments, NGOs, and thought leaders we can help find solutions to such

global challenges as providing enough healthy food for people everywhere,

decreasing dependence on fossil fuels, and protecting life and the environment.

21. On August 6, 2015, Chemours issued a press release entitled, “The Chemours

Company Reports Second Quarter 2015 Results and Announces Transformation Plan.” Therein,

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the Company, in relevant part, stated:

Second Quarter 2015 Highlights

Separation from DuPont completed on July 1, 2015

Net sales of $1.5 billion versus $1.7 billion in prior-year quarter

Adjusted EBITDA of $127 million versus $235 million in prior-year

quarter on weaker TiO2 pricing and currency headwinds

Net loss of $18 million, which included restructuring costs of $61 million

and interest expense of $28 million versus second quarter 2014 net income

of $116 million, which included restructuring costs of $20 million

Other Highlights

Targeting $140 million improvement in second half 2015 Adjusted

EBITDA versus the first half, reflecting lower costs, stronger

Fluoroproducts segment performance and TiO2 pricing at or near cyclical

lows

Announces five-point transformation plan to drive $500 million Adjusted

EBITDA improvement by 2017 with related target leverage of three times

o Reduce structural costs by $200 million in 2016 and a total of $350

million in 2017

o Optimize Chemical Solutions portfolio through review of strategic

alternatives excluding cyanide business

o Deliver $150 million Adjusted EBITDA improvement through

Altamira expansion, Opteon™ refrigerants and cyanide growth

o Refocus investments to reduce capital spending to $350 million in

2017 including investment to expand cyanide capacity by 50%

o Enhance our organization to operate with accountability, simplicity

and customer-centered mindset

New, independent Board of Directors expects to announce sustainable

dividend in third quarte

WILMINGTON, Del., August 6, 2015 - The Chemours Company (“Chemours”)

(NYSE: CC), a global chemical company with leading market positions in

titanium technologies, fluoroproducts and chemical solutions, today announced

financial results for the second quarter 2015. Chemours was a wholly-owned

subsidiary of DuPont during the period, and these results reflect a stand-alone

basis of presentation.

Second quarter net sales were $1.5 billion, a decrease of 10 percent from $1.7

billion in the prior-year quarter. Second quarter net loss was $18 million, or a pro

forma net loss of $0.10 per diluted share, versus net income of $116 million in the

second quarter 2014. Adjusted EBITDA was $127 million versus $235 million in

the prior year quarter. Profitability was reduced as a result of 11 percent lower-

global- average local TiO2 prices, approximately $48 million from unfavorable

currency movements and approximately $15 million from planned and unplanned

plant outages. Lower year-over-year corporate and other operating costs partially

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offset these impacts.

Chemours President and CEO Mark Vergnano said, “Now that our separation

from DuPont is complete and we are an independent entity, we have begun

aggressively driving a five-point plan to transform Chemours into a higher value

chemistry company. We will reduce costs, grow our market positions, optimize

our portfolio, refocus our investments, and enhance our company by building a

nimble, entrepreneurial culture that is customer centered. We believe that

executing against these priorities will enhance our Adjusted EBITDA by

approximately $500 million, without relying on improvement in the TiO2market,

and also reduce our leverage to approximately three times net debt to Adjusted

EBITDA in 2017.”

Titanium Technologies Titanium Technologies segment sales were $642 million, an 18 percent decline

versus the prior-year quarter. Segment Adjusted EBITDA was $95 million, a

decline of 55 percent compared to the prior-year quarter reflecting year-over-year

global average-local price decline of 11 percent and $34 million of unfavorable

currency. Sales declines were primarily due to lower global selling prices and

negative currency effects. Second-quarter volume declines in the Americas and

Asia Pacific regions were partially offset by increased demand in EMEA versus

the previous year.

Sequentially, sales increased 18 percent and Adjusted EBITDA was down 4

percent. Volume increased by 23 percent with growth in every region reflecting

season demand and typical market share. Volume gains were offset by a global

average price decline of 8 percent.

Fluoroproducts Fluoroproducts segment sales were $588 million, a 2 percent decline versus the

prior-year quarter. Segment Adjusted EBITDA was $66 million, a decline of 14

percent compared to the prior-year quarter. Higher demand for Viton™

fluoroelastomer, Opteon™ refrigerants and PTFE, was partially offset by lower

R22 volume associated with a regulatory-mandated phase out in the United States.

Increased volume and stronger realized prices were more than offset by $14

million of currency headwinds and $15 million of higher costs due to unplanned

plant outages during the quarter versus the previous year.

Chemical Solutions Chemical Solutions segment sales were $278 million, a 6 percent decline versus

the prior-year quarter. Segment Adjusted EBITDA was $7 million, slightly below

the prior-year quarter reflecting an unfavorable product mix.

Corporate and Other Corporate and Other expenses of $41 million were down $19 million, and interest

expense was $28 million. Corporate and Other expenses include an allocation of

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DuPont corporate costs along with Chemours-related environmental and legal

expenses.

On June 30, 2015, gross consolidated debt was $3.9 billion, and debt, net of cash,

was $3.7 billion. The tax rate was approximately 3 percent in the quarter; driven

primarily by discrete items related to the separation and restructuring.

2015 Outlook Chemours is targeting $140 million Adjusted EBITDA improvement in the

second half 2015 relative to the first half. The company anticipates that additional

reduction of structural costs, growth from Opteon™ and normalized operations

after extended maintenance shutdowns will contribute significant earnings

improvement during the second half of the year. The second-half performance

assumes TiO2 pricing at or near cyclical lows. Capital expenditures, excluding

separation-related spending, are projected to be $400 to $450 million as

construction of Altamira nears completion at the end of 2015. For the full year,

the company expects its effective tax rate to be in the mid- to high-twenty percent

range.

Five-Point Transformation Plan Chemours announced a plan to transform the company by reducing structural

costs, growing market positions, optimizing its portfolio, refocusing investments,

and enhancing its organization.

Reduce Structural Costs: Chemours expects that previously announced

restructuring actions taken in the second quarter will reduce SG&A and

plant fixed costs by $40 million in the second half of 2015. Additional

corporate and business segment SG&A and manufacturing efficiency

initiatives are expected to provide a total $200 million savings in 2016

with a targeted cost reduction of $350 million in 2017.

Optimize the Portfolio: Chemours has begun the evaluation of strategic

alternatives for the Chemical Solutions segment, excluding the cyanide

business.

Grow Market Positions: Chemours will focus on growing its leading

market positions through the continued ramp up of Opteon™, the mid-

2016 start-up of Altamira, and investments in the growth of its cyanide

business.

Refocus Investments: With the completion of Altamira, optimization of

the business portfolio, and concentrated growth investments in key

businesses, including the cyanide capacity expansion, Chemours expects

to reduce capital spending to $350 million by 2017.

Enhance our Organization: Through this plan, Chemours will foster an

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entrepreneurial organization based on a culture of accountability. It will

operate with simplicity, a customer-centered mindset and a commitment to

a safe and sustainable future.

Chemours expects the transformation plan to deliver $500 million of Adjusted

EBITDA improvement over 2015 in 2017. The company is targeting a reduction

of net debt to EBITDA to approximately three times in 2017 through a

combination of higher free cash flow from operations, lower capital spending, and

potential proceeds from asset sales.

On September 11, 2015, Chemours will pay to shareholders of record as of

August 3, 2015, the third-quarter dividend that was declared when the company

was a wholly-owned subsidiary of DuPont. The new Board of Directors is

assessing a sustainable, predictable dividend level for Chemours as an

independent company. Chemours expects the dividend from the fourth quarter

forward to be significantly less than the $100 million third quarter dividend and

expects to announce a sustainable dividend in the third quarter.

22. On the same day, Chemours filed its Quarterly Report with the SEC on Form 10-

Q for the fiscal quarter ended June 30, 2015. The Company’s Form 10-Q was signed by

Defendant Newman,1 and reaffirmed the Company’s financial results announced in the press

release issued on the same day.

23. On November 5, 2015, Chemours issued a press release entitled, “The Chemours

Company Reports Third Quarter 2015 Results.” Therein, the Company, in relevant part, stated:

Third Quarter 2015 Highlights

Net sales of $1.5 billion

Adjusted EBITDA of $169 million, a $42 million sequential improvement

driven by cost reductions and strong Fluoroproducts performance,

partially offset by weak TiO2 environment

Adjusted Net Income of $73 million, or $0.40 per diluted share

Net loss of $29 million, or a loss of $.16 per diluted share, which included

restructuring and impairment costs of $209 million and interest expense of

$51 million

Other Highlights

Initiated Five-Point Transformation Plan expected to deliver $500 million

Adjusted EBITDA improvements through 2017, while strengthening the

company’s balance sheet

1 The signature was filed on August 7, 2015 in an amendment on to the 10-Q.

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o Shut down production at Edge Moor Delaware facility and a line at

the New Johnsonville, Tennessee site, reducing TiO2 capacity by

approximately 150,000 tons

o Approximately $60 million of cost reductions realized in third

quarter, partially offset by unfavorable currency movements and

lower TiO2 prices

o All actions taken year-to-date expected to deliver $200 million in

sustainable run-rate savings

Announced fourth quarter dividend of $0.03 per share

Wilmington, Del., November 5, 2015 - The Chemours Company (“Chemours”)

(NYSE: CC), a global chemical company with leading market positions in

titanium technologies, fluoroproducts and chemical solutions, announced

financial results for the third quarter 2015.

Chemours President and CEO Mark Vergnano said, “We accomplished a great

deal in our first 90 days as an independent company. The meaningful

improvement over the second quarter is just one more sign of our commitment to

deliver our five-point transformation plan and the increasing strength of our

Fluoroproducts business. We remain focused on our cost reduction targets as

demonstrated with over $60 million hitting the bottom line in the third quarter.

While TiO2 market conditions remain soft, we are taking prudent actions to drive

continued improvements in our Adjusted EBITDA and free cash flow.”

Third quarter net sales were $1.5 billion, a decrease of 9 percent from $1.6 billion

in the prior-year quarter. Third quarter net loss was $29 million, or $0.16 per

diluted share, versus net income of $107 million in the prior-year quarter, or $0.59

per diluted share on a pro forma basis. Adjusted EBITDA for the third quarter

was $169 million versus $235 million in the prior-year quarter. Improved

profitability in Fluoroproducts, along with lower year-over-year corporate and

other operating costs, were more than offset by 13 percent lower average prices in

Titanium Technologies and $68 million of unfavorable currency movements

versus the prior-year quarter.

Sequentially, Adjusted EBITDA in the third quarter improved $42 million over

the second quarter. This improvement was driven by $60 million of lower costs,

Opteon™ growth and improved operations in the Fluoroproducts segment. These

benefits were partially offset by 3 percent lower TiO2 pricing and $6 million of

unfavorable currency movements versus the second quarter of 2015.

Titanium Technologies In the third quarter, Titanium Technologies segment sales were $616 million, an

18 percent decline versus the prior-year quarter. Segment Adjusted EBITDA was

$78 million, a decline of 59 percent compared to the prior-year quarter. Lower

year-over-year pricing and unfavorable currency reduced net sales by 13 percent

and 7 percent, respectively, while slightly higher year-over-year volume partially

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offset lower prices. A 2 percent increase in revenue from volume gains was the

result of increased demand in China, EMEA and

North America, partially offset by lower volume in Latin America and parts of

Asia Pacific versus the prior-year quarter.

Sequentially versus the second quarter, sales and Adjusted EBITDA decreased 4

percent and 14 percent, respectively. Volume increased by 1 percent with growth

in North America and China offset by lower volumes in EMEA and parts of Asia

Pacific. Volume gains were offset by a global price decline of 3 percent and

unfavorable currency movements of 1 percent versus the second quarter.

Approximately 150,000 tons of TiO2 capacity were shut down in the third quarter

between the Edge Moor site and a line at the New Johnsonville site. Customer

demand has been shifted to other facilities and collaboration with local and state

authorities began as site shutdown activities commenced. As a result of these

activities, the company recorded a $126 million charge associated with

impairment and employee separation costs. In the fourth quarter, the company

expects to benefit from higher utilization across the remaining more efficient asset

base.

Fluoroproducts Fluoroproducts segment sales in the third quarter were $575 million, flat versus

the prior-year quarter. Segment Adjusted EBITDA was $89 million, an increase

of 27 percent versus the prior-year quarter. More favorable product mix with

strong adoption of Opteon™ refrigerants and higher pricing for base refrigerants

under regulatory-mandated phase-out in the United States were partially offset by

lower refrigerant volumes and increased competitive pressure for fluoropolymers

versus the previous year quarter. Segment profitability was also impacted by $34

million of unfavorable currency movements versus the prior-year quarter.

Sequentially versus the second quarter, sales decreased 2 percent, while Adjusted

EBITDA increased 65 percent. Higher volume and pricing of fluorochemical

products increased sales, but these were offset by weaker demand for

polytetrafluoroethylene (PTFE). Normalized plant operations and cost reduction

efforts, along with growth from Opteon™ refrigerants, drove the improvement in

Adjusted EBITDA versus the second quarter.

Chemical Solutions In the third quarter, Chemical Solutions segment sales were $295 million, a 4

percent decline versus the prior-year quarter. Segment Adjusted EBITDA was $7

million, $2 million below the prior-year quarter reflecting strong sulfur and

cyanide volumes offset by an unplanned plant outage and lower average prices

due to product mix.

The company initiated a strategic review of the Chemical Solutions segment

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during the third quarter. This evaluation is expected to result in a combination of

asset sales, site shutdowns, and other measures to improve segment profitability.

In connection with the review, the company recorded a pre-tax fixed asset

impairment charge in the third quarter of $45 million and a pre-tax goodwill

impairment charge of $25 million.

Corporate and Other Corporate and Other represented a negative $5 million of Adjusted EBITDA.

Corporate and Other includes executive and certain public-company costs, as well

as legacy environmental and legal expenses that are unrelated to ongoing

operations. All remaining functional costs are allocated to the business reporting

segments. Third quarter expenses in Corporate and Other declined $28 million

versus the prior-year quarter and were $17 million lower than the second quarter.

Total allocated and unallocated functional costs declined by $20 million versus

the prior-year quarter and $4 million sequentially. Interest expense in the third

quarter was $51 million.

A tax benefit of approximately $78 million was primarily the result of

restructuring and asset impairment charges recorded and recognized during the

third quarter. For the 2015 full year, the company now expects its cash tax rate to

be in the low- to mid-20’s percentages. This rate is significantly higher than the

effective tax rate primarily due to the tax benefits previously described not

expected to be realized in 2015 for cash tax purposes.

On September 30, 2015, gross consolidated debt was $4.0 billion. Debt net of

cash was $3.7 billion. During the quarter, the company, along with its lenders,

entered into an amendment to the existing credit agreement that strengthens its

financial position by providing enhanced liquidity to implement the

Transformation Plan. The amendment modified the EBITDA definition in the

covenant calculation to allow pro forma benefits of announced cost reduction

initiatives.

In the third quarter, the company performed a balance sheet reconciliation

pursuant to the Separation Agreement with DuPont and recorded a net payable to

DuPont. Approximately $49 million, related to the excess of cash funding versus

the target at June 30, 2015, is expected to be paid by December 31, 2015.

Additionally, both companies are still finalizing reconciliations of working capital

and other accounts, and the net amount due to/from DuPont will be settled

pursuant to the Separation Agreement.

Five-Point Transformation Plan The company reported that cost actions taken year-to-date delivered

approximately $60 million of savings in the third quarter. As previously reported,

the cost savings initiatives are focused on reducing total controllable costs related

to people, services, and facilities. Those actions to date are expected to translate

into run-rate sustainable savings of $200 million. Additionally, the company

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began its portfolio optimization with the strategic review of the Chemical

Solutions portfolio. This process is expected to include asset sales, site

shutdowns, and other measures to improve segment profitability that will allow

the company to refocus its investments on its core business segments.

Outlook Vergnano commented, “Going forward, we expect to deliver additional cost

reductions and organic growth from market adoption of our novel Opteon™

refrigerant product line, a new technology with low global warming potential. In

the fourth quarter, we anticipate typical seasonal declines in volumes in our

Titanium Technologies and Fluoroproducts segments. Further, TiO2 price remains

under pressure. However, we expect these impacts will be offset by continuing

progress in cost reductions as we drive improvements across our organization and

facilities. These benefits are important as we continue to face uncertain global

economic conditions and continued soft TiO2 market dynamics.”

24. On the same day, Chemours filed its Quarterly Report with the SEC on Form 10-

Q for the fiscal quarter ended September 30, 2015. The Company’s Form 10-Q was signed by

Defendant Newman, and reaffirmed the Company’s financial results annoinced in the press

release issued the same day.

25. On February 23, 2016, Chemours issued a press release entitled, “The Chemours

Company Reports Fourth Quarter and Full Year 2015 Results” Therein, the Company, in

relevant part, stated:

Fourth Quarter 2015 Highlights


Adjusted EBITDA of $132 million

Free cash flow of $175 million led by working capital release of ~$399

million


Net loss of $86 million, or $0.48 per diluted share, after restructuring costs

of $88 million and interest expense of $53 million

Other Highlights

Announced $140 million Aniline sale to The Dow Chemical Company

Reduced costs by $100 million in second half of 2015 through

transformation initiatives

Reached agreement with DuPont and amended credit facility to further

enhance liquidity

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Full Year 2015 Highlights




Net loss of $90 million, or $0.50 per diluted share, after restructuring costs

and impairment charges of $333 million and interest expense of $132

million

Wilmington, Del., February 23, 2016 - The Chemours Company (“Chemours”)

(NYSE: CC), a global chemistry company with leading market positions in

titanium technologies, fluoroproducts and chemical solutions, announced

financial results for the fourth quarter and full year 2015.

Chemours President and CEO Mark Vergnano said, “In the fourth quarter, we

continued to make significant progress on our transformation plan against an

ongoing backdrop of challenging market conditions, which continued to

negatively impact our financial results. We executed well in the areas that were

within our control, resulting in approximately $100 million of lower costs during

the second half of 2015. We also made significant progress on our strategic

review of our Chemical Solutions portfolio, including the announced sale of the

Beaumont Aniline facility, planned exit of the Reactive Metals business, and

decision to retain the methylamines business.”

Fourth quarter net sales were $1.4 billion, a decrease of 12 percent from $1.5

billion in the prior-year quarter. Fourth quarter net loss was $86 million, or $0.48

per diluted share, versus net income of $79 million, or $0.44 per diluted share on

a pro forma basis in the prior-year quarter. Adjusted EBITDA for the fourth

quarter was $132 million versus $205 million in the prior-year quarter. Improved

profitability in Fluoroproducts and Chemical Solutions were more than offset by

14 percent lower average prices in Titanium Technologies and approximately $66

million of unfavorable currency movements versus the prior-year quarter.

Sequentially, sales and Adjusted EBITDA in the fourth quarter decreased by $126

million and $37 million, respectively from the third quarter. This was primarily

driven by seasonality in the Fluoroproducts segment, along with weaker

TiO2 prices, weaker demand in consumer electronics for fluoropolymers and $7

million of unfavorable currency movements. Additional transformation savings

resulted in lower structural costs in the quarter versus the third quarter 2015, and

partially offset the unfavorable revenue drivers.

Titanium Technologies In the fourth quarter, Titanium Technologies segment sales were $589 million, a

14 percent decline versus the prior-year quarter. Segment Adjusted EBITDA was

$62 million, a 61 percent decline compared to the prior-year quarter. Lower year-

over-year pricing and unfavorable currency reduced net sales by 14

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percent and 6 percent, respectively. Higher year-over-year volume contributed to

a 6 percent increase in revenue. Higher volumes in EMEA and North America

were partially offset by lower volume in Latin America and parts of Asia Pacific

versus the prior-year quarter. The higher volume and benefits from cost

reductions were more than offset by lower prices and $37 million of unfavorable

currency impacts.

Sequentially, versus the third quarter, sales and Adjusted EBITDA decreased 4

percent and 23 percent, respectively. Volume decreased by slightly less than 1

percent driven by seasonally lower demand in North America and China offset by

higher volumes in Latin America. Global price decline of 3 percent and

unfavorable currency movements of 1 percent were partially offset by lower costs,

primarily associated with the benefits from the recent Edgemoor plant closure in

the quarter versus the third quarter. In December 2015, Chemours announced a

modest price increase across its TiO2 product lines for 2016.

Fluoroproducts Fluoroproducts segment sales in the fourth quarter were $515 million, a decrease

of 10 percent versus the prior-year quarter. Segment Adjusted EBITDA was $80

million, an increase of 10 percent versus the prior-year quarter. Lower sales were

primarily the result of weaker demand for fluoropolymers in consumer electronics

and industrial applications and unfavorable currency movements versus the

previous year quarter. Growth from Opteon™, favorable product mix, and cost

reductions contributed to the improvement in Adjusted EBITDA despite

approximately $20 million of unfavorable currency movements versus the prior-

year quarter.

Sequentially, versus the third quarter, sales decreased 10 percent, while Adjusted

EBITDA decreased 12 percent. Lower sales were primarily the result of

seasonally lower demand for refrigerants and increased competitive pressure for

fluoropolymers versus the previous year quarter. Lower costs in the quarter were

more than offset by unfavorable product mix and currency movements.

Chemical Solutions In the fourth quarter, Chemical Solutions segment sales were $256 million, a 10

percent decline versus the prior-year quarter, primarily due to pass-through

impact on prices of lower raw material costs. Segment Adjusted EBITDA was

$16 million, $15 million above the prior-year quarter reflecting the timing of

licensing income and lower operating costs in the methylamines business.

In the fourth quarter, the company took the first step in the Chemical Solutions

strategic review process with the announced sale of its Beaumont Aniline facility

to The Dow Chemical Company for $140 million. Also in the quarter, Chemours

announced its intention to retain and improve the cost position of its

methylamines business and shut down its reactive metals business (RMS). The

shutdown of the Niagara RMS site is expected to deliver approximately $20

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million of savings in 2017. The company expects to close the aniline transaction

in the first quarter of 2016 and complete the strategic review of the remaining

Chemical Solutions businesses by the middle of the year.


Fourth quarter expenses in Corporate and Other declined $3 million versus the

prior-year quarter and were $16 million higher than the third quarter. The increase

versus the third quarter was primarily related to the timing of expenditures.

A tax benefit of approximately $35 million was the result of restructuring and

asset impairment charges recorded and recognized during the fourth quarter. For

the 2016 full year, the company expects its cash tax rate to be in the mid-teens

percentages.

Liquidity On December 31, 2015, gross consolidated debt was $4.0 billion. Debt, net of

cash, was $3.6 billion.

During the first quarter 2016, the company entered into an agreement with

DuPont, contingent upon the credit agreement amendment described below,

which provided for the extinguishment of payment obligations of cash and other

working capital true-ups previously contemplated by the Separation Agreement.

In addition, the agreement set forth an advance payment of approximately $190

million,

which was paid to Chemours in February 2016, for certain goods and services that

Chemours expects to provide to DuPont over the next 12 to 15 months.

Also in the quarter, the company and its lenders entered into an amendment of its

existing credit agreement. The amendment changed the leverage covenant to the

senior secured net leverage ratio, reduced the minimum levels of interest expense

coverage ratio, extended the time during which company can add back benefits of

announced cost reduction initiatives on a pro forma basis to Consolidated

EBITDA, increased the amount of pro forma add backs, and reduced the revolver

to $750 million. In aggregate, the company believes that these two agreements

provide enhanced liquidity and flexibility to implement its transformation plan.

Today, February 23, 2016, the Board of Directors of Chemours declared a

quarterly cash dividend of $0.03 per share on the company's common stock for

the first quarter of 2016. The dividend will be paid on March 31, 2016 to

stockholders of record as of the close of business on March 11, 2016.

Five-Point Transformation Plan The company reported that cost actions taken in 2015 delivered approximately

$100 million of savings in the second half of the year with about half of that

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amount coming in the fourth quarter. These initiatives are focused on reducing

total controllable costs related to people, services, and facilities. The company

reported approximately $60 million of lower SG&A1 and R&D costs during the

second half of 2015 and reduced controllable plant fixed costs by approximately

$40 million. These were achieved through the combination of headcount and

other employee-related cost reductions, site closures, and procurement and

productivity actions.

Outlook Vergnano commented, “We are on track with our transformation plan and already

have line of sight into the next $200 million of cost reductions for 2016. We

believe our transformation plan will help us deliver Adjusted EBITDA above our

2015 performance and result in modestly positive free cash flow. Our expected

2016 financial performance will be influenced by our key initiatives, including

cost reductions and the anticipated second half acceleration of Opteon™ adoption.

Our outlook reflects our current visibility on market factors, such as currency

movements, TiO2 pricing, and end-market demand.

Vergnano added, “By mid-2016, we expect to complete our strategic review of

the remaining Chemical Solutions portfolio and be on our way to our capital

spending target of $350 million in 2017 with a streamlined portfolio. In addition

to the $100 million already saved in 2015, we are on track to reduce our structural

costs by another $350 million and grow Adjusted EBITDA by $150 million

through Opteon™ market penetration, Altamira expansion, and cyanides

expansion. In total, we expect to deliver the $500 million of improvements by the

end of 2017.”

26. On February 25, 2016, Chemours filed its Annual Report with the SEC on Form

10-K for the fiscal year ended December 31, 2015. The Company’s Form 10-K was signed by

Defendant Newman, and reaffirmed the Company’s financial results previously announced on

February 23, 2016.

27. On May 2, 2016, Chemours issued a press release entitled, “The Chemours

Company Reports First Quarter 2016 Results.” Therein, the Company, in relevant part, stated:

First Quarter 2016 Highlights




Net Income of $51 million, or $0.28 per diluted share, including $89

million gain on sale of Beaumont aniline facility, interest expense of $57

million and restructuring costs of $17 million

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Other Highlights

Continued to build liquidity through working capital productivity, asset

sale proceeds and the DuPont prepayment, resulting in cash balance of

$435 million

Signed definitive agreement to sell Clean & Disinfect (C&D) business to

LANXESS for $230 million

Announced decision to begin investment in next increment of Opteon™

capacity using world-class technology to support growing demand beyond

2018

Wilmington, Del., May 2, 2016 - The Chemours Company (Chemours) (NYSE:

CC), a global chemistry company with leading market positions in titanium

technologies, fluoroproducts and chemical solutions, announced financial results

for the first quarter 2016.

Chemours President and CEO Mark Vergnano said, “Our first quarter

performance was a solid start to 2016 as we continue to execute on all aspects of

our transformation plan-reducing cost, growing market positions, optimizing our

portfolio, enhancing our organization and refocusing investments. We realized

over $40 million of transformation plan savings in the first quarter, and we

continue to have line of sight to $200 million of savings in 2016. Demand for

Opteon™ grew significantly as automotive manufacturers prepare for new

refrigerant regulations. We made steady progress on the strategic review of our

Chemical Solutions segment with the signing of a definitive agreement to sell the

C&D business. We strengthened our organization through the addition of new

leaders in key roles. Finally, our working capital initiatives across all our

businesses resulted in a notable year-over-year reduction of seasonal cash use

that, in turn, improved free cash flow considerably. Overall, we made steady

progress across all fronts.”

First quarter net sales were $1.3 billion, a decrease of 5 percent from $1.4 billion

in the prior-year quarter. First quarter net income was $51 million, or $0.28 per

diluted share, versus net income of $43 million, or $0.24 per diluted share on a

pro forma basis in the prior-year quarter. Adjusted EBITDA for the first quarter

was $128 million versus $145 million in the prior-year quarter. Lower average

prices in Titanium Technologies and approximately $22 million of unfavorable

currency movements were partially offset by improved profitability in

Fluoroproducts and Chemical Solutions versus the prior-year quarter.

Sales and Adjusted EBITDA decreased by $63 million and $4 million,

respectively, from the fourth quarter of 2015 to the first quarter of 2016. Lower

costs, higher volumes of fluoropolymers and lower Corporate and Other expenses

were offset by unfavorable mix in the Fluoroproducts segment, lower licensing

income and $6 million of unfavorable currency movements.

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Titanium Technologies In the first quarter, Titanium Technologies segment sales were $521 million, a 4

percent decline versus the prior-year quarter. Segment Adjusted EBITDA was

$54 million, a 42 percent decline compared to the prior-year quarter. Lower year-

over-year pricing and unfavorable currency movements reduced net sales 16

percent and 1 percent, respectively. Higher year-over-year volume contributed to

a 13 percent increase in revenue, with first quarter 2016 volume in line with

normal seasonal trends. All regions except China and Latin America experienced

higher volumes versus the prior-year quarter. The higher volume and benefits

from cost reductions were more than offset by lower prices and $7 million of

unfavorable currency impacts.

Sequentially, versus the fourth quarter of 2015, sales decreased 12 percent and

Adjusted EBITDA decreased $8 million, or 13 percent. Transformation plan cost

savings helped offset the impact from a global average price decline of less than1

percent and a $1 million impact from unfavorable currency movements. Volume

decreased 11 percent driven by seasonally lower demand in Asia and weaker

demand in Latin America that were partially offset by higher volumes in North

America and EMEA. In the quarter, Chemours began implementing a modest

price increase across its TiO2 product lines for 2016 that resulted in higher

quarter-end prices. In April 2016, Chemours announced an additional $150 per

tonne price increase effective May 1, 2016.

Fluoroproducts Fluoroproducts segment sales in the first quarter were $531 million, a decrease of

4 percent versus the prior-year quarter. Segment Adjusted EBITDA was $85

million, a 13 percent increase versus the prior-year quarter. Opteon™ sales

growth and broader participation in fluoropolymers markets drove increased sales

compared to the prior-year quarter, but were more than offset by weaker demand

for fluoropolymers in consumer electronics, regulated volume reductions of base

refrigerants and approximately $14 million of unfavorable currency movements.

Lower sales were offset by improved operations throughout the Fluoroproducts

manufacturing network, which contributed approximately $9 million in lower

year-over-year costs and led to higher Adjusted EBITDA versus the prior-year

quarter.

Sequentially, versus the fourth quarter of 2015, sales and Adjusted EBITDA

increased 3 percent and 6 percent, respectively. Growth in Opteon™ volumes was

notable in the quarter as automotive manufacturers prepare for the January 1,

2017 regulatory compliance in Europe. Those higher sales were partially offset by

seasonally lower demand for other refrigerants and continued competitive pricing

pressure for fluoropolymers versus the previous quarter. The increase in Adjusted

EBITDA was due in large part to lower costs in the quarter that were partially

offset by unfavorable product mix and currency movements.

Today, the company also announced its decision to invest in new Opteon™

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capacity using world-class technology. This investment will establish the world’s

largest hydrofluoroolefins (HFO) manufacturing facility positioned closest to the

biggest regulated markets - the United States and the European Union. With

expected start-up in 2018, the new facility will triple Chemours’ Opteon™

capacity to meet growing market demand for low global warming potential

products into mobile air conditioning and refrigeration applications.

Chemical Solutions In the first quarter, Chemical Solutions segment sales were $245 million, an 8

percent decline versus the prior-year quarter, primarily due to pass-through

impact on prices of lower raw material costs and softness in spot market pricing.

Segment Adjusted EBITDA was $10 million, $9 million above the prior-year

quarter, reflecting focused transformation plan initiatives that are delivering lower

operating costs across the segment.

Sequentially, sales decreased 4 percent versus the fourth quarter of 2015, while

Adjusted EBITDA was $6 million lower driven primarily by lower licensing

income in the first quarter.

In the first quarter, the company continued its strategic review and streamlining of

the Chemicals Solutions segment. In March, the company completed the sale of

its Beaumont Aniline facility to The Dow Chemical Company for $140 million,

and, in April, Chemours announced the sale of the C&D business to LANXESS

for $230 million. The company expects to close the C&D transaction in the

second half of 2016.


Corporate and Other expenses in the first quarter of 2016 declined $3 million and

$5 million versus the prior-year quarter and the fourth quarter 2015, respectively.

The company realized a cash tax rate of approximately 18 percent in the quarter,

reflecting the taxes associated with a gain on sale. For the full year 2016, the

company expects its cash tax rate to be in the mid- to high-teens percentages,

including the company’s anticipated geographic mix of earnings and an additional

gain anticipated with the C&D transaction.

Liquidity As of March 31, 2016, gross consolidated debt was $4.0 billion. Debt, net of cash,

was $3.6 billion.

Cash balances increased to $435 million at March 31, 2016. In the quarter, the

company received a $190 million prepayment from DuPont for certain goods and

services that Chemours expects to provide to DuPont over 12 to 15 months. At the

end of the quarter, the remaining balance was $166 million. On March 1, 2016,

the company also received $140 million of gross proceeds from the Beaumont

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aniline sale. Additionally, better inventory management drove improved working

capital performance despite typical seasonal use of cash. Excluding the benefit of

the DuPont prepayment, working capital1performance improved by $138 million

versus the prior-year quarter

As previously reported, the company and its lenders entered into an amendment

of its existing credit agreement during the first quarter. Chemours believes that

this agreement, along with the DuPont prepayment, provides enhanced liquidity

and flexibility to implement the company’s transformation plan.

Outlook Vergnano commented, “For the full year, we expect to deliver Adjusted EBITDA

above our 2015 performance, generating modestly positive free cash flow. We

remain focused on improving our profitability in Titanium Technologies, getting

the business back to acceptable profitability levels through cost reductions and

modest price increases that will support our reinvestment requirements for long-

term, quality supply for our customers. We began implementing TiO2 price

increases globally in the first quarter, ending the quarter with global average

prices higher than we started. We fully expect our new Altamira TiO2 line to be

begin commercial operation in the second quarter, as planned. Flawless execution

of our transformation plan is putting us well on our way to $500 million of

improved EBITDA in 2017 over 2015, significantly improving free cash flow and

reducing our net leverage.”

28. On May 9, 2016, Chemours filed its Quarterly Report with the SEC on Form 10-

Q for the fiscal quarter ended March 31, 2016. The Company’s Form 10-Q was signed by

Defendant Newman, and reaffirmed the Company’s financial results announced May 2, 2016.

29. The above statements contained in ¶¶20-28 were false and/or misleading, as well

as failed to disclose material adverse facts about the Company’s business, operations, and

prospects. Specifically, these statements were false and/or misleading statements and/or failed to

disclose: (1) that Chemours is potentially subject to massive liabilities relating to its

manufacturing of C8—also known as PFOA; (2) that DuPont created Chemours to distance

DuPont from the potential environmental liability; (3) that, as such, Chemours is a company

“designed for bankruptcy”; and (4) that, as a result of the foregoing, Defendants’ statements

about Chemours’ business, operations, and prospects, were false and misleading and/or lacked a

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reasonable basis.

Disclosures at the End of the Class Period

30. On June 2, 2016, Citron Research published a report on Chemours demonstrating

that Chemours is a business “designed for bankruptcy.” The report disclosed that Chemours is

potentially subject to massive liabilities relating to its manufacturing of C8—also known as

PFOA—and that DuPont created Chemours to distance DuPont from the potential environmental

liability. The report also pointed out that the Company was over-leveraged with nearly $4 billion

in debt on its books.

31. On this news, Chemours stock price fell $0.41 per share, or more than 4.6%, to

close at $8.25 per share on June 3, 2016, on unusually heavy trading volume.

CLASS ACTION ALLEGATIONS

32. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a class, consisting of all persons or entities that acquired

Chemours securities between June 19, 2015 and June 2, 2016, inclusive (the “Class Period”) and

who were damaged thereby (the “Class”). Excluded from the Class are Defendants, the officers

and directors of the Company, at all relevant times, members of their immediate families and

their legal representatives, heirs, successors or assigns and any entity in which Defendants have

or had a controlling interest.

33. The members of the Class are so numerous that joinder of all members is

impracticable. Throughout the Class Period, Chemours’ securities were actively traded on the

New York Stock Exchange (the “NYSE”). While the exact number of Class members is

unknown to Plaintiff at this time and can only be ascertained through appropriate discovery,

Plaintiff believes that there are hundreds or thousands of members in the proposed Class.

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Millions of Chemours shares were traded publicly during the Class Period on the NYSE. As of

May 2, 2016, Chemours had 181,470,350 shares of common stock outstanding. Record owners

and other members of the Class may be identified from records maintained by Chemours or its

transfer agent and may be notified of the pendency of this action by mail, using the form of

notice similar to that customarily used in securities class actions.

34. Plaintiff’s claims are typical of the claims of the members of the Class as all

members of the Class are similarly affected by Defendants’ wrongful conduct in violation of

federal law that is complained of herein.

35. Plaintiff will fairly and adequately protect the interests of the members of the

Class and has retained counsel competent and experienced in class and securities litigation.

36. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a) whether the federal securities laws were violated by Defendants’ acts as

alleged herein;

(b) whether statements made by Defendants to the investing public during the

Class Period omitted and/or misrepresented material facts about the business, operations, and

prospects of Chemours; and

(c) to what extent the members of the Class have sustained damages and the

proper measure of damages.

37. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as

the damages suffered by individual Class members may be relatively small, the expense and

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burden of individual litigation makes it impossible for members of the Class to individually

redress the wrongs done to them. There will be no difficulty in the management of this action as

a class action.

UNDISCLOSED ADVERSE FACTS

38. The market for Chemours’ securities was open, well-developed and efficient at all

relevant times. As a result of these materially false and/or misleading statements, and/or failures

to disclose, Chemours’ securities traded at artificially inflated prices during the Class Period.

Plaintiff and other members of the Class purchased or otherwise acquired Chemours’ securities

relying upon the integrity of the market price of the Company’s securities and market

information relating to Chemours, and have been damaged thereby.

39. During the Class Period, Defendants materially misled the investing public,

thereby inflating the price of Chemours’ securities, by publicly issuing false and/or misleading

statements and/or omitting to disclose material facts necessary to make Defendants’ statements,

as set forth herein, not false and/or misleading. Said statements and omissions were materially

false and/or misleading in that they failed to disclose material adverse information and/or

misrepresented the truth about Chemours’ business, operations, and prospects as alleged herein.

40. At all relevant times, the material misrepresentations and omissions particularized

in this Complaint directly or proximately caused or were a substantial contributing cause of the

damages sustained by Plaintiff and other members of the Class. As described herein, during the

Class Period, Defendants made or caused to be made a series of materially false and/or

misleading statements about Chemours’ financial well-being and prospects. These material

misstatements and/or omissions had the cause and effect of creating in the market an

unrealistically positive assessment of the Company and its financial well-being and prospects,

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thus causing the Company’s securities to be overvalued and artificially inflated at all relevant

times. Defendants’ materially false and/or misleading statements during the Class Period

resulted in Plaintiff and other members of the Class purchasing the Company’s securities at

artificially inflated prices, thus causing the damages complained of herein.

LOSS CAUSATION

41. Defendants’ wrongful conduct, as alleged herein, directly and proximately caused

the economic loss suffered by Plaintiff and the Class.

42. During the Class Period, Plaintiff and the Class purchased Chemours’ securities at

artificially inflated prices and were damaged thereby. The price of the Company’s securities

significantly declined when the misrepresentations made to the market, and/or the information

alleged herein to have been concealed from the market, and/or the effects thereof, were revealed,

causing investors’ losses.

SCIENTER ALLEGATIONS

43. As alleged herein, Defendants acted with scienter in that Defendants knew that

the public documents and statements issued or disseminated in the name of the Company were

materially false and/or misleading; knew that such statements or documents would be issued or

disseminated to the investing public; and knowingly and substantially participated or acquiesced

in the issuance or dissemination of such statements or documents as primary violations of the

federal securities laws. As set forth elsewhere herein in detail, Defendants, by virtue of their

receipt of information reflecting the true facts regarding Chemours, his/her control over, and/or

receipt and/or modification of Chemours’ allegedly materially misleading misstatements and/or

their associations with the Company which made them privy to confidential proprietary

information concerning Chemours, participated in the fraudulent scheme alleged herein.

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APPLICABILITY OF PRESUMPTION OF RELIANCE

(FRAUD-ON-THE-MARKET DOCTRINE)

44. The market for Chemours’ securities was open, well-developed and efficient at all

relevant times. As a result of the materially false and/or misleading statements and/or failures to

disclose, Chemours’ securities traded at artificially inflated prices during the Class Period. On

June 19, 2015, the Company’s stock closed at a Class Period high of $20.85 per share. Plaintiff

and other members of the Class purchased or otherwise acquired the Company’s securities

relying upon the integrity of the market price of Chemours’ securities and market information

relating to Chemours, and have been damaged thereby.

45. During the Class Period, the artificial inflation of Chemours’ stock was caused by

the material misrepresentations and/or omissions particularized in this Complaint causing the

damages sustained by Plaintiff and other members of the Class. As described herein, during the

Class Period, Defendants made or caused to be made a series of materially false and/or

misleading statements about Chemours’ business, prospects, and operations. These material

misstatements and/or omissions created an unrealistically positive assessment of Chemours and

its business, operations, and prospects, thus causing the price of the Company’s securities to be

artificially inflated at all relevant times, and when disclosed, negatively affected the value of the

Company stock. Defendants’ materially false and/or misleading statements during the Class

Period resulted in Plaintiff and other members of the Class purchasing the Company’s securities

at such artificially inflated prices, and each of them has been damaged as a result.

46. At all relevant times, the market for Chemours’ securities was an efficient market

for the following reasons, among others:

(a) Chemours stock met the requirements for listing, and was listed and

actively traded on the NYSE, a highly efficient and automated market;

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(b) As a regulated issuer, Chemours filed periodic public reports with the SEC

and/or the NYSE;

(c) Chemours regularly communicated with public investors via established

market communication mechanisms, including through regular dissemination of press releases

on the national circuits of major newswire services and through other wide-ranging public

disclosures, such as communications with the financial press and other similar reporting services;

and/or

(d) Chemours was followed by securities analysts employed by brokerage

firms who wrote reports about the Company, and these reports were distributed to the sales force

and certain customers of their respective brokerage firms. Each of these reports was publicly

available and entered the public marketplace.

47. As a result of the foregoing, the market for Chemours’ securities promptly

digested current information regarding Chemours from all publicly available sources and

reflected such information in Chemours’ stock price. Under these circumstances, all purchasers

of Chemours’ securities during the Class Period suffered similar injury through their purchase of

Chemours’ securities at artificially inflated prices and a presumption of reliance applies.

48. A Class-wide presumption of reliance is also appropriate in this action under the

Supreme Court’s holding in Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128

(1972), because the Class’s claims are, in large part, grounded on Defendants’ material

misstatements and/or omissions. Because this action involves Defendants’ failure to disclose

material adverse information regarding the Company’s business operations and financial

prospects—information that Defendants were obligated to disclose—positive proof of reliance is

not a prerequisite to recovery. All that is necessary is that the facts withheld be material in the

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sense that a reasonable investor might have considered them important in making investment

decisions. Given the importance of the Class Period material misstatements and omissions set

forth above, that requirement is satisfied here.

NO SAFE HARBOR

49. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

The statements alleged to be false and misleading herein all relate to then-existing facts and

conditions. In addition, to the extent certain of the statements alleged to be false may be

characterized as forward looking, they were not identified as “forward-looking statements” when

made and there were no meaningful cautionary statements identifying important factors that

could cause actual results to differ materially from those in the purportedly forward-looking

statements. In the alternative, to the extent that the statutory safe harbor is determined to apply to

any forward-looking statements pleaded herein, Defendants are liable for those false forward-

looking statements because at the time each of those forward-looking statements was made, the

speaker had actual knowledge that the forward-looking statement was materially false or

misleading, and/or the forward-looking statement was authorized or approved by an executive

officer of Chemours who knew that the statement was false when made.

FIRST CLAIM

Violation of Section 10(b) of The Exchange Act and

Rule 10b-5 Promulgated Thereunder

Against All Defendants

50. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.

51. During the Class Period, Defendants carried out a plan, scheme and course of

conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing

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public, including Plaintiff and other Class members, as alleged herein; and (ii) cause Plaintiff and

other members of the Class to purchase Chemours’ securities at artificially inflated prices. In

furtherance of this unlawful scheme, plan and course of conduct, defendants, and each of them,

took the actions set forth herein.

52. Defendants (i) employed devices, schemes, and artifices to defraud; (ii) made

untrue statements of material fact and/or omitted to state material facts necessary to make the

statements not misleading; and (iii) engaged in acts, practices, and a course of business which

operated as a fraud and deceit upon the purchasers of the Company’s securities in an effort to

maintain artificially high market prices for Chemours’ securities in violation of Section 10(b) of

the Exchange Act and Rule 10b-5. All Defendants are sued either as primary participants in the

wrongful and illegal conduct charged herein or as controlling persons as alleged below.

53. Defendants, individually and in concert, directly and indirectly, by the use, means

or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about Chemours’ financial

well-being and prospects, as specified herein.

54. These defendants employed devices, schemes and artifices to defraud, while in

possession of material adverse non-public information and engaged in acts, practices, and a

course of conduct as alleged herein in an effort to assure investors of Chemours’ value and

performance and continued substantial growth, which included the making of, or the

participation in the making of, untrue statements of material facts and/or omitting to state

material facts necessary in order to make the statements made about Chemours and its business

operations and future prospects in light of the circumstances under which they were made, not

misleading, as set forth more particularly herein, and engaged in transactions, practices and a

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course of business which operated as a fraud and deceit upon the purchasers of the Company’s

securities during the Class Period.

55. Each of the Individual Defendants’ primary liability, and controlling person

liability, arises from the following facts: (i) the Individual Defendants were high-level executives

and/or directors at the Company during the Class Period and members of the Company’s

management team or had control thereof; (ii) each of these defendants, by virtue of their

responsibilities and activities as a senior officer and/or director of the Company, was privy to and

participated in the creation, development and reporting of the Company’s internal budgets, plans,

projections and/or reports; (iii) each of these defendants enjoyed significant personal contact and

familiarity with the other defendants and was advised of, and had access to, other members of the

Company’s management team, internal reports and other data and information about the

Company’s finances, operations, and sales at all relevant times; and (iv) each of these defendants

was aware of the Company’s dissemination of information to the investing public which they

knew and/or recklessly disregarded was materially false and misleading.

56. The defendants had actual knowledge of the misrepresentations and/or omissions

of material facts set forth herein, or acted with reckless disregard for the truth in that they failed

to ascertain and to disclose such facts, even though such facts were available to them. Such

defendants’ material misrepresentations and/or omissions were done knowingly or recklessly and

for the purpose and effect of concealing Chemours’ financial well-being and prospects from the

investing public and supporting the artificially inflated price of its securities. As demonstrated

by Defendants’ overstatements and/or misstatements of the Company’s business, operations,

financial well-being, and prospects throughout the Class Period, Defendants, if they did not have

actual knowledge of the misrepresentations and/or omissions alleged, were reckless in failing to

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obtain such knowledge by deliberately refraining from taking those steps necessary to discover

whether those statements were false or misleading.

57. As a result of the dissemination of the materially false and/or misleading

information and/or failure to disclose material facts, as set forth above, the market price of

Chemours’ securities was artificially inflated during the Class Period. In ignorance of the fact

that market prices of the Company’s securities were artificially inflated, and relying directly or

indirectly on the false and misleading statements made by Defendants, or upon the integrity of

the market in which the securities trades, and/or in the absence of material adverse information

that was known to or recklessly disregarded by Defendants, but not disclosed in public

statements by Defendants during the Class Period, Plaintiff and the other members of the Class

acquired Chemours’ securities during the Class Period at artificially high prices and were

damaged thereby.

58. At the time of said misrepresentations and/or omissions, Plaintiff and other

members of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff

and the other members of the Class and the marketplace known the truth regarding the problems

that Chemours was experiencing, which were not disclosed by Defendants, Plaintiff and other

members of the Class would not have purchased or otherwise acquired their Chemours securities,

or, if they had acquired such securities during the Class Period, they would not have done so at

the artificially inflated prices which they paid.

59. By virtue of the foregoing, Defendants have violated Section 10(b) of the

Exchange Act and Rule 10b-5 promulgated thereunder.

60. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and

the other members of the Class suffered damages in connection with their respective purchases

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and sales of the Company’s securities during the Class Period.

SECOND CLAIM

Violation of Section 20(a) of The Exchange Act

Against the Individual Defendants and DuPont

61. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.

62. The Individual Defendants acted as controlling persons of Chemours within the

meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level

positions, and their ownership and contractual rights, participation in and/or awareness of the

Company’s operations and/or intimate knowledge of the false financial statements filed by the

Company with the SEC and disseminated to the investing public, the Individual Defendants had

the power to influence and control and did influence and control, directly or indirectly, the

decision-making of the Company, including the content and dissemination of the various

statements which Plaintiff contends are false and misleading. The Individual Defendants were

provided with or had unlimited access to copies of the Company’s reports, press releases, public

filings and other statements alleged by Plaintiff to be misleading prior to and/or shortly after

these statements were issued and had the ability to prevent the issuance of the statements or

cause the statements to be corrected.

63. In particular, each of these Defendants had direct and supervisory involvement in

the day-to-day operations of the Company and, therefore, is presumed to have had the power to

control or influence the particular transactions giving rise to the securities violations as alleged

herein, and exercised the same.

64. As set forth above, Chemours and the Individual Defendants each violated

Section 10(b) and Rule 10b-5 by their acts and/or omissions as alleged in this Complaint. By

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virtue of their positions as controlling persons, the Individual Defendants are liable pursuant to

Section 20(a) of the Exchange Act. As a direct and proximate result of Defendants’ wrongful

conduct, Plaintiff and other members of the Class suffered damages in connection with their

purchases of the Company’s securities during the Class Period.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for relief and judgment, as follows:

(a) Determining that this action is a proper class action under Rule 23 of the Federal

Rules of Civil Procedure;

(b) Awarding compensatory damages in favor of Plaintiff and the other Class

members against all defendants, jointly and severally, for all damages sustained as a result of

Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon;

(c) Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including counsel fees and expert fees; and

(d) Such other and further relief as the Court may deem just and proper.

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury.

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Dated: GLANCY PRONGAY & MURRAY LLP

By:______DRAFT________

Lionel Z. Glancy

Robert V. Prongay

Lesley F. Portnoy

Charles H. Linehan

1925 Century Park East, Suite 2100

Los Angeles, CA 90067

Telephone: (310) 201-9150

Facsimile: (310) 201-9160

LAW OFFICES OF HOWARD G. SMITH Howard G. Smith

3070 Bristol Pike, Suite 112

Bensalem, PA 19020

Telephone: (215) 638-4847

Facsimile: (215) 638-4867

Attorneys for Plaintiff __________

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Case No.: DRAFT Behalf of All Others Similarly Situated, CLASS … · 2016-06-05 · the chemours...

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Transcript of Case No.: DRAFT Behalf of All Others Similarly Situated, CLASS … · 2016-06-05 · the chemours...