Former Attorney General of Louisiana Initiates Gogo Investigation
Former Attorney General of Louisiana Charles C. Foti, a partner at the law firm of Kahn Swick and Foti (KSF), revealed that KSF has commenced an investigation into Gogo.
On May 4, the company disclosed that because of increased costs and lost revenue resulting from widespread problems with its 2Ku global satellite system antennas, including manufacturing and software issues, it would be unable to meet Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) profit guidance of $75 million to $100 million and was withdrawing its “2018 guidance for Adjusted EBITDA, airborne Cash Capital Expenditure (CAPEX), and airborne equipment inventory purchases related to airline-directed installations, as well as Free Cash Flow guidance.” Then, on May 7, Moody’s announced a downgrade to the company’s credit rating due to “the company’s weakening credit metrics, operational difficulties, and deteriorating liquidity.”
Thereafter, the company and certain of its executives were sued in a securities class action lawsuit, charging them with failing to disclose material information during the class period, violating federal securities laws, which is ongoing. KSF’s investigation is focusing on whether Gogo’s officers and/or directors breached their fiduciary duties to Gogo’s shareholders or otherwise violated state or federal laws.