Law360 (November 2, 2020, 6:06 PM EST) -- A legal team comprising attorneys from Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check LLP will represent a proposed class of investors alleging cruise line Carnival Corp. misrepresented its management of burgeoning threats posed by the coronavirus.
In an order Friday, U.S. District Judge K. Michael Moore appointed as co-lead plaintiffs a pair of institutional investors — the New England Carpenters Pension and Guaranteed Annuity Funds and the Massachusetts Laborers' Pension and Annuity Funds — and signed off on the pension funds' two-firm counsel team, finding that "appointing the funds as lead plaintiffs, and Bernstein Litowitz and Kessler Topaz as lead counsel is warranted."
Together, the funds allege, they lost roughly $5.7 million in connection with Carnival's alleged securities fraud.
Judge Moore, the chief of the Southern District of Florida in Miami, told the funds that they have 30 days to either amend or consolidate the proposed class action or pick an already-filed version of the suit to use as the operative complaint in the matter.
In the same order, the judge denied a request for lead plaintiff appointment from Abraham Atachbarian, a nonparty whose separate suit, on behalf of sellers of put contracts and purchasers of call options for shares of Carnival, the judge consolidated into the existing action.
In the suit, Carnival's investors allege that as the coronavirus was emerging as a global health concern, Carnival misrepresented the company's health and safety protocols and its "role in facilitating the transmission of the virus," which hurt investors when trading prices for Carnival shares later cratered as the virus spread.
The suits seek to hold Carnival, CEO Arnold Donald and Chief Financial Officer David Bernstein liable.
The cruise industry has been slammed with litigation relating to its management of the virus in litigation making a range of claims. Some investors claim companies intentionally downplayed the risks of the virus in sales pitches; one suit includes photos of a packed, maskless deck during a salute to essential workers on board a cruise. Numerous cases of the virus, some resulting in deaths, have been linked to cruises, both among passengers and crews.
The industry was also largely shut out of stimulus aid in the spring, in part due to the fact that most of the sector's major players are incorporated abroad.
The suit would include those who purchased Carnival shares between Jan. 28 and May 1, and on Monday, Carnival was trading at $13.55, a price slightly lower than the $13.93 it was trading at at the end of the proposed class period.
The latest developments in the suit came as the U.S. Center for Disease Control and Prevention on Friday issued a "framework for conditional sailing" laying out a phased approach to cruise resumption. On Monday, several cruise companies, though not Carnival, announced their cruises wouldn't restart until January.
On Monday, counsel for Carnival declined to comment, and representatives for the other parties did not immediately respond to requests for comment.
The New England Funds are represented by Hannah Ross, Avi Josefson and Michael D. Blatchley of Bernstein Litowitz Berger & Grossmann LLP; Naumon A. Amjed, Darren J. Check and Ryan T. Degnan of Kessler Topaz Meltzer & Check LLP; and Zachary S. Bower of Carella Byrne Cecchi Olstein Brody & Agnello PC.
Carnival and its executives are represented by Daniel S. Sinnreich, Richard A. Rosen and Theodore V. Wells Jr. of Paul Weiss Rifkind Wharton & Garrison LLP and Erin K. Kolmansberger and Mark F. Raymond of Nelson Mullins Broad & Cassel.
The case is In Re Carnival Corp. Securities Litigation, case number 1:20-cv-22202, in the U.S. District Court for the Southern District of New York.
--Additional reporting by Nathan Hale. Editing by Alyssa Miller.
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