Plaintiff seeks to inspect books and records relating to meetings of Peabody’s Board of Directors (the “Board”) dating from no earlier than the date of the Company’s response to the Demand (defined, infra) regarding the Company’s dissemination of materially false and/or misleading statements and the Company’s failure to disclose material adverse facts about the Company’s production and plans at Peabody’s North Goonyella Mine.
On September 22, 2018, a fire erupted in Peabody’s North Goonyella Mine, which is an underground coal mine located in Queensland, Australia. No announcement regarding the fire was immediately made to the Company’s shareholders.
On September 25, 2018, days after the fire occurred, the Company filed a Form 8-K with the SEC. The 8-K failed to mention any fire or smoke at the North Goonyella Mine, but stated, in relevant part:
Peabody noted today that gas levels at its North Goonyella Mine have been variable and remain elevated. The Company is working with the Queensland Mines Inspectorate and third-party experts as we continue a progress plan aimed at reducing gas levels and accommodating a safe return to mining operations. Determination of the timing of completion of the longwall move and expected financial effects will be made when gas levels subside and personnel can safely resume longwall move activities.
Later on September 25, 2018, the Company issued an “Updated Statement” on the North Goonyella Mine, which stated, in relevant part:
Gas levels at Peabody’s North Goonyella Mine in Queensland have been variable and remain elevated, with employees and other personnel remaining above ground. . . . The company is working with the Queensland Mines Inspectorate and third-party experts as we continue a progressive plan aimed at reducing gas levels. . . .
Peabody has relocated more than half of the major equipment associated with the originally planned two-month longwall move when elevated gas levels were detected. The company has notified customers of expected impacts to October shipments from the extended longwall move.
Determination of the timing of completion of the longwall move and expected financial effects will be made when gas levels subside and personnel can safely resume longwall move activities.
On September 28, 2018, the Company issued a press release finally confirming the North Goonyella Mine fire. The press release stated that the fire was “ongoing,” and the effects were uncertain and being assessed. The press release further stated that the Company “does not expect any production from North Goonyella in the fourth quarter of 2018.”
Following this announcement of the fire, Peabody’s shares fell 13.5%, or $5.54 a share, to close at $35.64 per share on September 28, 2018.
A copy of the complaint can be viewed here:
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