Texas Appeals Court Dismisses Securities Claims Against Venator’s IPO Underwriters

Paul, Weiss won the dismissal, on appeal, of securities fraud claims in state court in Texas against our clients, underwriters of an IPO by UK-based pigment maker Venator Materials PLC. Claims against Venator and its executives were also dismissed.

In their putative class action filed in state court in Dallas in February 2019, shareholders alleged that Venator, its executives and underwriters misrepresented the negative impact of a fire at a Finnish production facility in the registration statements related to Venator’s 2017 IPO and a secondary offering. Plaintiffs also alleged that the underwriters failed to conduct adequate due diligence.

Reversing the lower court ruling that it had personal jurisdiction, the appellate court panel rejected plaintiffs’ arguments that our clients – a group of underwriters, including Citigroup Global Markets, Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC – were subject to state court jurisdiction because they made payments in Texas to Huntsman Corp., a Texas-based company that spun off Venator at the time of the IPO. The panel likewise dismissed claims against Venator and its executives on jurisdictional grounds. Claims against Huntsman remain pending.

The Paul, Weiss team included litigation partners Geoffrey Chepiga and Audra Soloway and counsel Caitlin Grusauskas.