Description: Stockholder derivative action against board of directors and upper management at a company that produces a "purportedly biodegradable plastic alternative."
Perri v. Croskrey
Filing Date Type File Action Taken Summary 10/06/2021 Complaint Download Complaint filed. Stockholder Derivative Complaint Alleged Misleading Statements Regarding Plastic Alternative’s Biodegradability. A stockholder derivative action was filed in federal district court in Delaware against members of the board of directors and upper management for Danimer Scientific, Inc., a company that produces polyhydroxyalkanoates (PHAs), which the complaint described as “a purportedly biodegradable plastic alternative used in a range of plastic applications.” The complaint alleged that the defendants breached their fiduciary duties by failing to correct false and misleading statements and omissions of material fact that, among other things, overstated the products’ biodegradability. The complaint cited a report released by an investment firm in April 2021 that noted “inconsistencies” in Danimer’s claims regarding its business and operations. Among other things, the report stated that PHA bioplastics in anaerobic environments release the greenhouse gas methane. The complaint alleged that Danimer’s stock price fell after release of this report, as well as after the publication of a second report. The complaint asserted claims of violations of the Securities and Exchange Act, breach of fiduciary duties, unjust enrichment, and waste of corporate assets. The suit’s allegations are similar to those in a securities class action brought in the federal district court for the Eastern District of New York.