Carnival Covid-19 Securities Suit Gets Lead Plaintiffs, Counsel

Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check LLP will serve as lead counsel in a would-be securities class suit alleging Carnival Corp. concealed information about its adherence to health and safety protocols in the wake of Covid-19, a Florida federal court said.

The New England Carpenters Pension and Guaranteed Annuity Funds and the Massachusetts Laborers’ Pension and Annuity Funds will be lead plaintiffs, Chief Judge K. Michael Moore of the U.S. District Court for the Southern District of Florida said.

The suit, filed in May on behalf of holders of common stock, alleges Carnival misrepresented its role in the transmission of the virus, and alleges the company’s stock tumbled when news of the outbreak aboard its ships hit.

The plaintiffs, citing an April 16 Bloomberg Businessweek article, allege the company knew about the scale of the outbreak before it filed its annual report to the Securities and Exchange Commission on Jan. 28.

Abraham Atachbarian sued on behalf of those with options to buy and sell Carnival stock in June.

The court consolidated the suits and rejected Atachbarian’s bid to be named co-lead plaintiff.

Differences in the nature of the securities held by the funds and Atachbarian don’t outweigh the interests of judicial economy served by consolidation of two proposed class actions premised on the same alleged violations, the court said Oct 30.

The pension funds are the most adequate plaintiffs and the presumptive lead plaintiffs, the court said.

Preliminarily, the funds showed they incurred losses of about $5.7 million on purchases of 206,149 shares of Carnival stock made during the class period—a greater loss than that incurred by any other plaintiffs that sought lead status, and a significantly larger loss than that realized by Atachbarian, the court said.

And the firms selected by the funds as lead counsel are preeminent securities class action law firms with extensive experience in successfully prosecuting securities fraud class actions together, the court said.

The court declined to create a subclass for options investors.

Stull Stull & Brody and others represented Atachbarian. Paul Weiss Rifkind Wharton & Garrison LLP and Nelson Mullins Broad and Cassel represented Carnival.

The case is Service Lamp Corp. Profit Sharing Plan v. Carnival Corp., S.D. Fla., No. 1:20-cv-22202, 10/30/20.