Bombardier plots defense against lawsuit over 2018 stock tumble

Bombardier Inc. said it plans to “vigorously defend itself” against a shareholder lawsuit after the Superior Court of Quebec authorized the class action case to proceed.

The lawsuit brought by Denis Gauthier alleges that Bombardier and top executives including former Chief Executive Officer Alain Bellemare and former Chief Financial Officer John Di Bert “made false and misleading representations” in their 2018 financial outlook, according to a statement from the company.

Bombardier shares lost about two-thirds of their value in the space of less than four months in the second half of 2018 as its cash flow failed to improve at the pace investors expected. At the time, the company was dealing with costly aircraft-development programs and laying off staff. Management was also under scrutiny from Quebec’s securities regulator for a controversial executive stock sales plan. 

The class action suit alleges that Bombardier failed to disclose material facts to investors in a timely matter. Gauthier is the plaintiff on behalf of everyone who acquired Bombardier securities from Aug. 2, 2018 to Nov. 8, 2018, and then held them until Nov. 8, 2018, according to the press release.

Bombardier, Bellemare and Di Bert have denied any wrongdoing and the company said in its press release that it is considering its options including the potential to file an appeal.

The Montreal-based company eventually sold the centerpiece of its commercial jet program to Airbus SE and unloaded its rail transportation division in a successful effort to stay solvent. The firm is now focused on manufacturing private jets.