Pomerantz Appointed Lead Counsel in ATI Physical Therapy Securities Litigation

On November 18, 2021, U.S. District Judge Edmond E. Chang of the Northern District of Illinois appointed Pomerantz LLP as Lead Counsel on behalf of Phoenix Insurance Company Ltd. and The Phoenix Pension & Provident Funds, Lead Plaintiffs in Burbige v. ATI Physical Therapy, Inc., 21-cv-4349 (N.D. Ill.), a securities action brought on behalf of a class of defrauded investors concerning allegations that ATI Physical Therapy, Inc. (“ATI” or the “Company”) had made false and misleading statements regarding its business operations and financial performance.

ATI is an outpatient physical therapy company which owns and operates nearly 900 physical therapy clinics across 25 states. On June 17, 2021, the Company became public via a business combination with Fortress Value Acquisition Corp. II, a special purpose acquisition company formed for the purpose of effecting a merger or similar business combination with one or more businesses.

Allegations against ATI include that: (i) the Company was experiencing attrition among its physical therapists; (ii) ATI faced increasing competition for clinicians in the labor market; (iii) as a result of the foregoing, the Company faced difficulties retaining therapists and incurred increased labor costs; and (iv) as a result of the labor shortage, the Company would open fewer new clinics.

On July 26, 2021, ATI announced its second quarter 2021 financial results in which it revealed that “the acceleration of attrition among [its] therapists in the second quarter and continuing into the third quarter, combined with the intensifying competition for clinicians in the labor market, prevented us from being able to meet the demand we have and increased our labor costs.” The Company also reduced its fiscal 2021 forecast due to the foregoing factors.

On this news, ATI’s share price fell $3.62 per share, or 43%, to close at $4.72 per share on July 26, 2021.