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SQBG.US
id: 1379
Sequential Brands (SQBG) $9.75M Investor Settlement
The process of distributing settlement funds to claimants has started.
$9,750,000
Cash SettlementS.D. New York
Court1:21-cv-07296
Case number11/09/2016
Class period Start12/11/2020
Class period End03/11/2025
Claim deadlineSequential Brands Group agreed to a $9.75 million settlement resolving claims that investors were misled about the company’s business, financial well-being, goodwill, and an SEC investigation.
Outline:
Sequential Brands Group said in 2017 that its goodwill was not impaired and that its internal controls were effective. The company continued to carry substantial goodwill on its balance sheet during the year. In November 2017, Sequential disclosed $36.5 million in non-cash trademark impairment charges tied to five non-core brands. In February 2018, it disclosed a much larger $304.1 million goodwill adjustment, and the settlement resolves investor claims tied to those events.
Timeline:
- March 14, 2017: Sequential Brands Group filed its 2016 Form 10-K and stated that goodwill was tested for impairment and that internal control over financial reporting was effective as of December 31, 2016.
- May 10, 2017: Sequential Brands Group filed its first quarter 2017 Form 10-Q.
- November 13, 2017: Sequential Brands Group filed its third quarter 2017 Form 10-Q and stated that it had performed a quantitative assessment and determined that goodwill was not impaired for the period ended September 30, 2017.
- February 28, 2018: Sequential Brands Group announced fourth quarter and full year 2017 financial results and disclosed a $304.1 million goodwill adjustment.
- December 11, 2020: The SEC filed a complaint alleging that Sequential failed to take into account clear, objective evidence of likely goodwill impairment and delayed a material write-down.
Background:
In March 2017, Sequential Brands Group filed its 2016 annual report and said it had tested goodwill for impairment and determined that no write-down was needed. The company also said its internal control over financial reporting was effective as of December 31, 2016.
Sequential continued to report significant goodwill during 2017. In its first-quarter 2017 results announced in May 2017, the company listed goodwill at $307.744 million.
The company’s disclosures changed later that year. In November 2017, Sequential announced $36.5 million in non-cash impairment charges for trademarks tied to five non-core brands.
A few months later, in February 2018, Sequential disclosed a far larger $304.1 million goodwill adjustment. Those later impairment disclosures stood in sharp contrast to the company’s earlier statements that no goodwill impairment was necessary.
What Can Investors Expect Now?
Sequential Brands Group agreed to a $9.75 million settlement resolving claims that investors were misled about the company’s business, financial well-being, goodwill, and an SEC investigation.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section.
Case Type
US Securities Class Action
Case Status
Disbursement
Alleged Offence
Mismanagement,
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Filing date
03/16/2021
Plaintiffs
Peter D’Arcy
Defendants
Yehuda Shmidman; Karen Murray; Gary Klein; Andrew Cooper
Judge
J. Paul Oetken
Administrator
Angeion
Settlement agreement date
2024-10-30
Court hearing date
02/25/2025
Exclusion deadline
02/04/2025
Objection deadline
02/04/2025
Attorney fee
$2,476,526
Trades matching type
FIFO
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