Gainey McKenna & Egleston Announce Class Action Lawsuit Filed Against Vertex Energy, Inc. (VTNR) – Vertex Energy (NASDAQ:VTNR)

March 6, 2023 12:21 p.m | 3 minutes read

NEW YORK, March 6, 2023 (GLOBE NEWSWIRE) — Gainey McKenna & Egleston announces that it has filed a class action lawsuit against securities in the United States District Court for the Southern District of Alabama on behalf of any person or entity that purchased the securities was filed by Vertex Energy, Inc. (“Vertex” or the “Company”) (NASDAQ:VTNR) between April 1, 2022 and August 8, 2022, both dates inclusive (the “Class Period”).

The Complaint alleges that the Defendants made false and/or misleading statements and/or failed to disclose the following: (1) Prior to acquiring the Mobile Refinery, the Defendants entered into inventory and crack spread hedging derivatives that margins to 50% of Mobile Refinery’s projected production for the period April 1, 2022 to September 30, 2022, affecting over 6.5 million barrels of refined fuel production; (2) As a result, the hedges severely limited Vertex’s ability to capitalize on record high crack spreads in place at the time of the acquisition, resulting in losses in excess of $90 million in the second quarter of fiscal 2022; (3) Prior to acquiring the Mobile Refinery, the Defendants had entered into an inventory brokerage agreement with investment bank Macquarie Group under which Macquarie acquired (from third parties), owned and sold (to Vertex) all crude oil inventory used at the Mobile Refinery and also all in purchased (by Vertex), owned and sold (to third parties) refined fuel stocks produced by the Mobile Refinery; (4) As a result, the stringent terms of the agreement, including Vertex’s obligation to purchase hedges to protect Macquarie’s position in holding crude and refinery inventory, combined with the fact that the oil market was in a state of backwardation caused Vertex to incur significant fees and inventory losses; (5) Prior to the acquisition of the Mobile Refinery, Defendants had entered into a bulk purchase agreement with Shell Oil as part of the Mobile Acquisition Agreement, pursuant to which Vertex was forced to pay Shell Oil prices above market for the additional crude oil inventories and the state of backwardation on the oil market; (6) Immediately after acquiring the Mobile refinery, Vertex experienced production problems that resulted in significant shortages of refined fuel; (7) after acquiring the Mobile Refinery, Defendants exaggerated the alleged profit margins that could be realized at the Refinery; and (8) due to the above misrepresentations and omissions, the Mobile Refinery has no “Generation[] strong EBITDA” “[d]The Mobile refinery’s “first 30 days” of operation and transition was not “seamless.” When the true details emerged, the lawsuit alleges that investors suffered harm.

Investors who have purchased or otherwise acquired Vertex stock should contact the company before May 2, 2023 Lead Plaintiff’s Application Deadline. A lead plaintiff is a representative party acting on behalf of other group members in conducting the litigation. If you would like to discuss your rights or interests related to this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. by Gainey McKenna & Egleston at (212) 983-1300 or by email at [email protected] or [email protected]

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