| COMPANY |
PACS Group, Inc. |
| COURT |
United States District Court for the Southern District of New York |
| CASE NUMBER |
24-cv-08636 |
| JUDGE |
The Hon. Lewis Jeffrey Liman |
| CLASS PERIOD |
1) common stock pursuant and/or traceable to PACS’ April 11, 2024 IPO; and/or 2) securities between April 11, 2024 through November 5, 2024 |
| SECURITY TYPE |
Common Stock and Securities |
LEAD PLAINTIFF DEADLINE IS JANUARY 13, 2025.
If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.
Case Background:
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 published a report based on a 5-month investigation that included interviews with 18 former PACS employees, competitors, and an analysis of more than 900 PACS facility cost reports. The report alleged that PACS had “abused 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 – 2023, enabling PACS to IPO in early 2024 with the illusion of legitimate growth and profitability.” The report further alleged that PACS engaged in a scheme to maintain revenue by “bill[ing] thousands of unnecessary respiratory and sensory integration therapies to Medicare Part B regardless of clinical need or outcomes,” and a widespread practice of falsifying documentation, including by engaging in a “scheme whereby PACS attempts to fool regulators by ‘renting’ licenses from third parties to ‘hang’ on buildings” and then “either employs unlicensed administrators or has administrators manage multiple buildings in excess of state mandated limits.” Similarly, the report alleged PACS engaged in a scheme related to licensure and staffing of nurses, whereby “PACS secretly lists uncertified nurse aides (NAs) as certified in the system, in an apparent scheme to cheat staffing ratios” and “retroactively add fake RN hours” in order “to meet minimum staffing requirements, boost star ratings, and avoid costly penalties.” On this news, PACS’ share price fell $11.93, or 27.78%, to close at $31.01 per share on November 4, 2024.
Then, on November 6, 2024, before the market opened, PACS announced that it would postpone its fiscal third quarter 2024 earnings release and disclosed that the company had “received civil investigative demands from the federal government regarding the Company’s reimbursement and referral practices that may or may not be related to this week’s third-party report.” On this news, PACS’ share price fell $11.45, or 38.76%, to close at $18.09 per share on November 6, 2024. Since the filing of the complaint in this action, PACS stock has traded as low as $18.09 per share, a more than 13.9% decline from the $21 per share IPO price.
The complaint alleges that, in the Registration Statement and throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) PACS engaged in a scheme to submit false Medicare claims which drove more than 100% of PACS operating and net income from 2020 – 2023; (2) the company engaged in a “scheme” to bill thousands of unnecessary respiratory and sensory integration therapies to Medicare; (3) PACS engaged in a scheme to falsify documentation related to licensure and staffing; and (4) 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.
What is a Lead Plaintiff?
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.