NEW YORK — A Scott+Scott Securities Practice Group case filed against pool manufacturer Hayward Holdings, Inc. and its top executives has successfully overcome a significant hurdle to move forward.
Judge William J. Martini, United States District Court Judge for the District of New Jersey, this week granted in part and denied in part the defendants’ motions to dismiss the case.
As the consolidated amended class action complaint alleges, the defendants made false and misleading statements about the company’s channel inventory, demand, and sales. Hayward’s executives during several earnings calls between fiscal year 2021 and 2022, sugarcoated slumping sales and increasing inventory backlogs.
Judge Martini noted in his order that the allegations “support Plaintiff’s claim that statements denying excess channel inventory, downplaying the improvement of order backlogs and portraying demand as ‘sustained,’ or ‘robust,’ or ‘healthy,’ were false or misleading.”
Hayward’s share prices plummeted shortly after the truth about the company’s channel inventory and performance emerged, as company insiders dumped its stock, causing significant losses to shareholders.
The case is: City of Southfield Fire and Police Retirement Systems v. Hayward Holdings Inc. et al., No. 2:23-CV-04146 (D. NJ.) and the class period is October 27, 2021 to July 28, 2022, inclusive.