Avaya Holdings Corp. (AVYA) Failed to Disclose Deficient Internal Control Over Financial Reporting
A class action on behalf of all investors who purchased or otherwise acquired Avaya Holdings Corp. (NYSE: AVYA) between November 22, 2021 and November 29, 2022, for violations of the Securities Exchange Act of 1934. Avaya purports to be a “global leader in digital communications products, solutions, and services for businesses of all sizes delivering its technology predominately through software and services.”
According to the complaint, during the class period, defendants failed to disclose that the Company’s internal control over financial reporting was deficient and the Company had failed to design and maintain effective controls over its whistleblower policies and its ethics and compliance program.
On July 28, 2022, Avaya announced the termination of its CEO and its preliminary Q3 2022 financial results that included expected revenues and adjusted EBITDA well below previously given guidance and an unqualified but “significant” impairment charge. Avaya also withdrew its 2022 guidance. On this news, Avaya’s stock price fell $1.19 per share, or almost 57%, to close at $0.90 per share on July 29, 2022.
Then, on August 9, 2022, Avaya announced there was a substantial doubt about its ability to continue as a going concern and its Audit Committee commenced internal investigations into circumstances involving the Company’s financial results for the quarter and matters raised by a whistleblower. On this news, Avaya’s stock fell to $0.61 per share, or over 45%.
Finally, on November 30, 2022, Avaya disclosed material weaknesses in the Company’s internal control over finance and stated that the Company’s Annual Report on Form 10-K for its fiscal year 2021 ended September 30, 2021, should no longer be relied upon. On this news, Avaya’s stock fell 14.28%, to close at $0.96 per share.
What’s Next: Similarly situated shareholders may be eligible to participate in the class action against Avaya Holdings Corp. Shareholders who want to act as lead plaintiff for the class must file their papers by March 6, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery as a result of the Avaya financial situation.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
