Berger Montague (Canada) PC represents investors that charge Chesswood Group Limited of violating the anti-manipulation sections of the Ontario Securities Act

(October 11, 2024). Berger Montague (Canada) PC’s client charges Chesswood Group Limited of breaching common law and the Ontario Securities Act in violations of the anti-misrepresentations clause.

On July 22, 2024, before the market opened, Chesswood released a statement that it would need to restate its 1Q 2024 financial statements and MD&A as a result of its previously disclosed errors in calculating its borrowing base for the purposes of its syndicated revolving credit facility (“SRCF”) and would be required to:

(a) Write down goodwill and intangible assets by material amounts;
(b) Write down deferred tax assets and liability by material amounts;
(c) Disclose that it was not in compliance with the SRCF’s Debt Covenants; and
(d) Disclose that it would have a going concern warning.

The market impact of this negative material fact news was harsh and immediate on the price for Chesswood’s securities; sending Chesswood’s share price from $2.81 to $2.66, which continued to fall through the next day down to $2.35. Over the course of the following ten (10) days, Chesswood’s share price dropped from $2.66 to $1.67.

On August 7, 2024, Chesswood announced that it would not be able to release its 2Q 2024 financial statements and MD&A, and was investigating whether it would also restate its F/2023 financial statements; and that it’s securities would be subject to a failure to file cease trade order, i.e., the securities ceased trading and there is no longer a public market for these securities.

On August 16, 2024, Chesswood’s securities became subject to a failure to file cease trade order, i.e., the securities ceased trading and there is no longer a public market for these securities.

Chesswood has ceased providing continuous disclosure statements to the markets and, in Canada, its securities are a value of $0.00; and in the United States the value is $0.18 as of the date of this Pleading.

The litigation is being led by lawyer Vince DeMarco and supervised by Andrew Morganti.