NEW YORK--(BUSINESS WIRE)--The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired PACS Group, Inc. (“PACS” or the “Company”) (NYSE:PACS): (a) common stock pursuant and/or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s April 11, 2024 initial public offering (“IPO” or the “Offering”); and/or (b) securities during the period of April 8, 2024, to November 5, 2024, inclusive (“the Class Period”). Investors have until January 13, 2025, to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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On April 11, 2024, PACS conducted its IPO, selling 21,428,572 shares of common stock at a price of $21.00 per share, receiving net proceeds of approximately $450 million.
On November 4, 2024, Hindenburg Research issued a report questioning PACS claims to have discovered a winning turnaround formula for transforming poor performing skilled nursing facilities into “cash spigots”. The report claimed that PACS’ turnaround strategy boils down to “systematically scamming taxpayer-funded healthcare program,” including billing for services and procedures that were not needed and/or rendered. The report highlighted PACS’ alleged abuse of a COVID-era waiver in a scheme that involved falsely submitting false Medicare claims, which drove more than 100% of PACS operating and net income from 2020 to 2023, enabling PACS to IPO in April 2024 with the illusion of legitimate growth and profitability. On this news, the price of PACS shares declined by $11.93 per share, or approximately 28%, from $42.94 per share on November 1, 2024, to close at $31.01 on November 4, 2024.
Then, on November 6, 2024, PACS announced that it would postpone its fiscal third quarter 2024 earnings release. PACS further disclosed that it received civil investigative demands from the federal government regarding the Company’s reimbursement and referral practices that may or may not be related to a third-party report. On this news, the price of PACS shares declined by $11.45 per share, or approximately 38%, from $29.54 per share on November 5, 2024, to close at $18.09 on November 6, 2024.
The complaint alleges that, in the Registration Statement and throughout the Class Period, PACS failed to disclose to investors: (1) that the Company engaged in a scheme to submit false Medicare claims which drove more than 100% of PACS operating and net income from 2020 2023; (2) that the Company engaged in a scheme to bill thousands of unnecessary respiratory and sensory integration therapies to Medicare; (3) that the Company engaged in a scheme to falsify documentation related to licensure and staffing; and (4) that, as a result of the foregoing, Defendants positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased or otherwise acquired PACS securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
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