Pomerantz Appointed Lead Counsel in GOL Linhas Aéreas Inteligentes Securities Litigation
On January 6, 2021, U.S. District Judge Ramon E. Reyes, Jr. of the Eastern District of New York appointed Pomerantz LLP as Lead Counsel on behalf of Lead Plaintiff Artur Timotheo in Hornea v. GOL Linhas Areas Inteligentes S.A., 20-cv-4243 (E.D.N.Y.), a securities litigation being pursued on behalf of a class of defrauded investors concerning allegations that GOL Linhas Aéreas Inteligentes S.A. (“GOL” or the “Company”) failed to disclose adverse facts pertaining to the Company’s negative net working capital.
GOL is a Brazilian-based budget airline that provides passengers with air transportation services in Brazil, the rest of South America, the Caribbean and the United States.
The complaint alleges that, between March 14, 2019 and July 22, 2020, Defendants failed to disclose that: (i) GOL had material weaknesses in its internal controls; (ii) there was substantial doubt as to the Company’s ability to continue to exist as a going concern because of negative net working capital and net capital deficiency; and (iii) as a result, Defendants’ statements about GOL’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
On June 16, 2020, GOL filed a Notification of Late Filing on Form 12b-25 with the SEC, stating that it could not timely file its annual report for fiscal year 2019. On this news, GOL’s American Depository Share (“ADS”) price fell $0.27 per share, or 3.57%, to close at $7.30 per share on June 16, 2020.
On June 29, 2020, after the market closed, GOL filed its annual report for the fiscal year ending December 31, 2019 on Form 20-F with the SEC (the “2019 20-F”). In the 2019 20-F, KPMG stated the following with respect to the Company’s ability to exist as a going concern: “[T]he accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a negative net working capital and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern.” On this news, GOL’s ADS price fell $0.14 per share, or 2.02%, to close at $6.78 per share on June 30, 2020.
The, on July 23, 2020, GOL announced that it had dismissed KPMG Auditores Independentes as the Company’s registered auditing firm. On this news, GOL’s ADS price fell $0.55 per share, or 7.05%, to close at $7.25 per share on July 23, 2020.