Chicago Business Litigation Lawyer Blog
Sometimes things happen outside a business owner’s control that affects the business. It’s understandable, but that does not justify failing to reveal to investors if the company is suffering financially as a result. In fact, executives and board directors of publicly traded companies are required to disclose the financial state of the company to their investors on a regular basis.
After the documentary, “Blackfish,” was released, SeaWorld’s business suffered significantly, but executives and board directors allegedly refused to reveal to shareholders the effect the documentary was having on the amusement park’s business.
The documentary details the story of Tilikum, a performing killer whale that was held captive in amusement parks for decades, including SeaWorld, where he famously killed a trainer – the first trainer to die at SeaWorld, although not the first time Tilikum had been involved in a death in a marine park.
Contrary to their name, killer whales have never been known to kill humans in the wild, leading many to wonder what causes them to attack when in captivity. The film examines the lives Tilikum took, before they were cut short, the cruel treatment of killer whales held in captivity, and the pressures of the sea-park industry, which makes billions of dollars every year.
According to a recent lawsuit filed against SeaWorld, the company allegedly misled shareholders about the impact the documentary was having on the company.
The company admitted in August of 2014 that the movie was hurting business, but internal emails show the executives complaining about the impact of the documentary months before they acknowledged it publicly. Investors have a right to know how the companies in which they’re investing are faring, and if something is hurting business, executives are obligated to let them know about it right away.
Judge Michael Anello, of the U.S. District Court for the Southern District of California, recently approved class-action status for the shareholders who are suing SeaWorld. Investors can qualify to take part in the class if they owned stock in SeaWorld Entertainment between August 29, 2013, and August 12, 2014, and did not sell their stock prior to August 13th, 2014, when the company publicly acknowledged it was suffering financially as a result of the documentary. Class members cannot be, or have ever been, a SeaWorld executive, board member, or related to anyone who has ever been a SeaWorld executive or board member.
After the shareholder lawsuit was filed, SeaWorld announced it was also under investigation by the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) for comments executives made at the time the documentary was released.
The film continues to affect the giant amusement park, not only with the current lawsuit and investigations into the company’s practices but also leading to some changes the sea park announced as late as 2016 that it would be making. Those changes include an announcement that the company would stop breeding, which is a controversial practice, and would be phasing out its theatrical whale shows in order to focus on the natural behaviors of whales. The company has also been working hard to develop new rides and attractions to help counter waning attendance since the release of the documentary.
Super Lawyers named Illinois commercial law trial attorney Peter Lubin a Super Lawyer and Illinois business dispute attorneys Patrick Austermuehle and Andrew Murphy Rising Stars in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois business trial lawyers have over thirty years of experience in litigating complex class action, copyright, noncompete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes. Our Lake Forest and Kenilworth business dispute lawyers, civil litigation lawyers and copyright attorneys handle emergency business lawsuits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud. You can contact us by calling at 630-333-0333. You can also contact us online here.