Thursday 19 September 2019

Fund asks US court to refuse Ryanair efforts to dismiss case

Questions use of SEC filings in motion

The pension fund launched the case against Ryanair last year after the airline endured a pilot rostering fiasco in 2017 that ultimately saw it recognise trade unions. Photo: PA
The pension fund launched the case against Ryanair last year after the airline endured a pilot rostering fiasco in 2017 that ultimately saw it recognise trade unions. Photo: PA
John Mulligan

John Mulligan

A US pension fund suing Ryanair in a class action lawsuit has asked a New York court to prevent the airline from using certain stock exchange filings in support of the carrier's motion to have the case against it dismissed.

Alabama's City of Birmingham Firemen's and Policemen's fund has also asked the court to reject Ryanair's motion to have the case thrown out.

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The pension fund launched the case against Ryanair last year after the airline endured a pilot rostering fiasco in 2017 that ultimately saw it recognise trade unions.

The fund has claimed that Ryanair and chief executive Michael O'Leary made false and misleading statements to shareholders regarding employment issues at the airline.

The pension fund has also alleged that increased costs resulting from union recognition, coupled with lower profits, have wiped out "millions" in shareholder value and caused "substantial damage" to the fund.

"This is a straightforward securities fraud," the fund has alleged in new US court filings. It has claimed that Mr O'Leary had dismissed reports of labour unrest at Ryanair in the months prior to the rostering issues becoming public, and had also sold shares in the carrier.

"But unbeknownst to investors, Ryanair's cost advantages were dependent on substandard labour practices that had led pilots to flee," the fund has claimed.

Ryanair has dismissed the allegations of fraud, insisting they are based on nothing more than the benefit of hindsight. In June, it asked the court to throw out the case, claiming that it does "not state an actionable claim of securities fraud". Its lawyers have also insisted that the allegations by the fund do not provide "a single internal document or confidential witness, or any contemporaneous fact that can support [its] version of events".

Opposing Ryanair's motion to dismiss, the pension fund has insisted that "at a minimum, defendants were reckless in claiming that 'nothing has changed' and that profitability would not be impacted by unionisation".

It has also asked that the New York court strike some documentation that Ryanair has filed in support of its motion to have the case against it dismissed, including some public filings with the US Securities & Exchange Commission.

The fund claimed that Ryanair cites the SEC exhibits as containing the truth of contested matters in the case.

"The court should not take judicial notice of these so-called 'facts'," the fund claimed in its own filing.

"Rather, the court should only consider the SEC filings 'to determine what the documents stated' and 'not to prove the truth of their contents'," the fund insisted, citing a previous unrelated ruling.

Irish Independent

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