Canadian Court Approves Shareholders Class Action Lawsuit Against Bombardier

Canadian aircraft manufacturer Bombardier is staring at a class action lawsuit related to disclosures of important facts related to the company’s finances in 2018. The development comes after a judge approved the lawsuit, but Bombardier says that it will vigorously defend itself.

Class action lawsuit against Bombardier

A class action lawsuit filed against Bombardier by its shareholders has now been authorized by a Quebec judge. The lawsuit claims that the aircraft manufacturer was not completely forthright in disclosing the company’s financial situation in a timely manner, leading to investors buying Bombardier stocks without complete information.

Photo: Bombardier

It is alleged that Bombardier, then-CEO Alain Bellemare, and then-chief financial officer John Di Bert did not disclose important facts regarding the organization’s financial forecast. The lawsuit was filed in 2019 in Quebec Superior Court by shareholder Denis Gauthier and is regarding company stocks bought between August 2 and November 8, 2018.

In the months preceding November 8, Bombardier said that it would be able to achieve its financial goals linked to its restructuring. But it was a different story following its November financial results, during which 5,000 job cuts were announced, along with reports of free cash flow that was “well below” expectations of breaking even when the proceeds from a recent factory sale were not considered. The company’s stock dipped 23% following the revelations.

Photo: Bombardier

Bombardier to vigorously defend itself

On May 27, Bombardier announced that it intends to vigorously defend itself, with the company and the individual defendants denying any wrongdoing. The company released a statement that said,

“The Court has not yet heard or ruled on the merits of the allegations underpinning this class action and Bombardier is currently reviewing the Authorization Decision and is assessing its options, including the possibility of filing an appeal.”

Recent Bombardier news

Bombardier has had a few other developments in recent weeks, including unveiling a new global branding and identity on April 24 when it officially revealed a brand-new logo – representing the silhouette of an aircraft breaking the sound barrier.

This happened as the company moves towards becoming a manufacturer of business jets only. It is currently developing the revolutionary Global 8000, considered the company’s flagship aircraft of a new era and is expected to enter service in the first half of 2025.

Photo: Bombardier

Around that time, Bombardier also announced its financial results for the first quarter, with revenues of $1.3 billion, and an adjusted EBITDA of $205 million. The company recorded 20 aircraft deliveries and said that it remained on track to reach its planned guidance for 2024.

On May 8, Bombardier officially inaugurated its new production facility located at Toronto Pearson International Airport (YYZ). It is the main production facility for all the Global variants, including the Global 5500, Global 6500, and the ultra-long-range Global 7500.

Related

Bombardier Officially Opens Its New Plant at Toronto Pearson

The new production facility replaces its Downsview facility.

Recently, Bombardier Defense inaugurated a new office in Adelaide, Australia, expanding the company’s Asia-Pacific presence to better serve customers in essential markets. Bombardier highlighted that the new location further complements the opening of the Melbourne Service Centre in September 2022.

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