Introduction to the Fortrea Class Action Lawsuit
The Fortrea class action lawsuit seeks to represent purchasers or acquirers of Fortrea Holdings Inc. (NASDAQ: FTRE) securities between July 3, 2023 and February 28, 2025, inclusive (the “Class Period”). Captioned Deslande v. Fortrea Holdings Inc., No. 25-cv-04630 (S.D.N.Y.), the Fortrea class action lawsuit charges Fortrea and certain of Fortrea’s top executives with violations of the Securities Exchange Act of 1934.
If you suffered substantial losses and wish to serve as lead plaintiff of the Fortrea class action lawsuit, or just have general questions about you rights as a shareholder, please contact attorney Timothy L. Miles of the Law Offices of Timothy L. Miles, at no cost, by calling 855/846-6529 or via e-mail at [email protected]. Lead plaintiff motions for the Fortrea class action lawsuit must be filed with the court no later than August 1, 2025.
Fortrea Holdings Inc. Company Profile
Fortrea Holdings Inc. is a global clinical development and commercialization services company, which wasformerly part of Labcorp. Fortrea operates as a contract research organization (CRO) providing services to biopharmaceutical, biotechnology, medical device, and diagnostic companies. Fortrea offers a range of services including clinical trial management, clinical pharmacology, and consulting solutions.
Core Business
Fortrea focuses on clinical trial management (Phases I-IV), clinical pharmacology, and post-approval services.
Services
Fortrea manages various aspects of clinical trials, including phase I through IV clinical trial management, clinical pharmacology, and consulting services. The company offers full-service, functional service provider, and hybrid service delivery models. Fortrea focuses on oncology, central nervous system and neurodegenerative, rare diseases, and cell and gene therapies.
History
The company was incorporated in 2023. It has roots dating back to 1968 and was previously known as Labcorp Drug Development before becoming Fortrea Holdings in February 2023. Labcorp completed a corporate spin-off of the company in July 2023.
Financials
- Revenue: Fortrea reported $651.3 million in revenue for the first quarter of 2025. The company had $2,696.4 million in revenue for the full year 2024.
- Net Loss: Fortrea reported a GAAP net loss of $(562.9) million for the first quarter of 2025, which included a non-cash goodwill impairment charge. The company reported a GAAP net loss of $(271.5) million for the full year 2024.
- Adjusted EBITDA: Fortrea reported adjusted EBITDA of $30.3 million for the first quarter of 2025. The company reported adjusted EBITDA of $202.5 million for the full year 2024.
- Guidance: For the full year 2025, Fortrea targets revenues between $2,450 million to $2,550 million and adjusted EBITDA between $170 million and $200 million.
Headquarters
Durham, North Carolina, United States.
Understanding Securities Fraud Class Action Lawsuits
Securities fraud class action lawsuits represent a significant legal mechanism for investors who have suffered financial losses due to corporate malfeasance. These lawsuits, such as the Fortrea class action lawsuit, typically arise when a company or its executives engage in deceptive practices that mislead investors about the company’s financial health or prospect.
The goal of such litigation is to hold the perpetrators accountable and secure compensation for the affected investors. Securities fraud encompasses a range of activities, including insider trading, false financial statements, and misleading disclosures, all of which can severely impact market integrity and investor confidence.
In a class action context, a group of investors collectively brings the lawsuit against the defendant, which could be a corporation or its executives. This collective approach is particularly powerful in the securities realm because it allows individual investors, who might not have the resources to pursue litigation on their own, to band together and seek justice.
The class action mechanism ensures that the legal process is efficient and that the interests of all affected investors are represented.
The complexity of securities fraud class action lawsuits requires plaintiffs to navigate a labyrinth of legal standards and procedural hurdles. One of the most significant challenges is surviving a motion to dismiss, a legal maneuver by the defendants to have the case thrown out before it reaches trial.
Understanding the nuances of these lawsuits is crucial for any stakeholder involved, as it sets the stage for the strategic decisions that will follow. In the case of the Fortrea class action lawsuit, these elements come into sharp focus, highlighting the importance of a well-crafted legal strategy.
Overview of the Compass Diversified Class Action Lawsuit
The Fortrea class action lawsuit is a securities class action lawsuit that centers on allegations of misleading investors through the provision of inaccurate or incomplete information regarding the company’s financial status and operations. Such allegations, if proven true, could result in significant legal and financial consequences for Compass Diversified. You need to grasp the magnitude of these claims and their potential impact on the company’s future.
Understanding the lawsuit requires analyzing the details of the allegations. Investors claim that Fortrea’s disclosures were not as transparent as they should have been, leading to financial losses once the truth was revealed. Legal experts are examining whether there was a deliberate attempt to mislead stakeholders, which could lead to punitive measures.
For anyone involved in investing, the Fortrea class action lawsuit serves as a stark reminder of the importance of due diligence and the risks associated with corporate investments. As you navigate through the nuances of this case, consider how transparency and accountability play pivotal roles in maintaining investor trust and confidence in the market.
Allegations in the Fortrea Class Action Lawsuit
Fortrea is a global clinical research organization (“CRO”) that provides biopharmaceutical product and medical device development solutions to pharmaceutical, biotechnology, and medical device customers. According to the complaint, in June 2023, Labcorp Holdings Inc. spun off Fortrea as a standalone, publicly traded company (the “Spin-Off”). At the time of the Spin-Off, certain of the long-term projects in Fortrea’s portfolio remained ongoing (the “Pre-Spin Projects”).
In connection with the Spin-Off, Labcorp and Fortrea entered into several transition services agreements (the “TSAs”), pursuant to which Fortrea pays Labcorp to provide certain transitional services for a set period.
The Fortrea class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that:
- Fortrea overestimated the amount of revenue the Pre-Spin Projects were likely to contribute to Fortrea’s 2025 earnings;
- Fortrea overstated the cost savings it would likely achieve by exiting the TSAs;
- As a result, Fortrea’s previously announced EBITDA targets for 2025 were inflated; and (iv) accordingly, the viability of Fortrea’s post-Spin-Off business model, as well as its business and/or financial prospects, were overstated.
The Fortrea class action lawsuit further alleges that on September 25, 2024, Jefferies published a report downgrading Fortrea from buy to hold, citing perceived weaknesses in Fortrea’s business model as a CRO amid pressure on biotechnology funding and suggested that the cost savings Fortrea expects to achieve by exiting the TSAs are “[n]ot as [m]aterial as [o]ne [m]ight [t]hink,” stating that “IT infrastructure costs to exit the TSAs are already non-GAAPed out of adjusted EBITDA. Thus, once TSAs are exited, [Fortrea] will just be replacing TSA costs with internal operating costs.” On this news, the price of Fortrea stock fell more than 12%, according to the complaint.
Then, on December 6, 2024, market analyst Baird Equity Research downgraded Fortrea to neutral from outperform after Fortrea abruptly cancelled two scheduled conferences, stating that “[g]iven our ongoing concerns around the sector, [Fortrea’s] choppy history post spin, and lack of clarity on the abrupt communications course change, we cannot recommend an actionable investment (buy or sell),” according to the complaint. The Fortrea lawsuit alleges that on this news, the price of Fortrea stock fell more than 8%.
Finally, on March 3, 2025, the Fortrea class action lawsuit further alleges that Fortrea announced its fourth quarter and full year 2024 financial results, disclosing that its “targeted revenue and adjusted EBITDA trajectories for 2025 [were] not in line with [its] prior expectations.”
According to the Fortrea lawsuit, specifically, in an earnings call held that same day, Fortrea revealed that Fortrea’s Pre-Spin projects are “late in their life cycle [and] have less revenue and less profitability than expected for 2025,” that “post-spin work is not coming on fast enough to offset the pre-spin contract economics,” and that “older versus newer mix issue will continue to negatively impact [Fortrea’s] financial performance during 2025.”
On this news, the price of Fortrea stock fell more than 25%, according to the Fortrea class action lawsuit.
The Lead Plaintiff Process Under the PSLRA and Its Impact on the Fortrea Lawsuit
The Private Securities Litigation Reform Act (PSLRA) of 1995 was enacted to address issues of frivolous lawsuits in securities fraud cases, and one of its significant provisions was the establishment of the lead plaintiff process. The lead plaintiff has a crucial role in representing the interests of the class in a class action lawsuit, including those related to the Fortrea lawsuit. Understanding the lead plaintiff process under the PSLRA is pivotal for any investor or entity involved in such litigation.
Under the PSLRA, once a securities class action lawsuit is filed, a notice must be published to inform potential class members of the lawsuit. This notice typically includes information about the claims and the class period. Interested parties have 60 days from the notice date to apply to the court to be appointed as lead plaintiff.
The court is tasked with appointing the “most adequate plaintiff,” which is generally presumed to be the person or group of persons with the largest financial interest in the relief sought by the class, provided they meet other typicality and adequacy requirements under Rule 23 of the Federal Rules of Civil Procedure.
The lead plaintiff is responsible for selecting and retaining counsel to represent the class, subject to court approval. This ensures that the interests of the class are prioritized and that there is effective legal representation. The lead plaintiff must also manage litigation decisions, such as settlement discussions and trial strategies, ensuring that these actions are in the best interest of all class members.
For instance, in a complex case like the Fortrea lawsuit, having a competent lead plaintiff can significantly impact the lawsuit’s outcome, including securing a favorable settlement or judgment.
It’s important for potential lead plaintiffs to understand their responsibilities and the implications of taking on this role. Being a lead plaintiff often requires more active participation in the case, such as attending depositions and other court-related activities. However, it also provides a unique opportunity to influence the direction of the litigation and potentially secure better outcomes for all involved.
In conclusion, the lead plaintiff process under the PSLRA is designed to ensure that securities class action lawsuits are managed by individuals or entities with significant stakes in the outcome. This process aims to deter frivolous lawsuits and align the interests of all class members with those leading the litigation. For anyone involved in a securities class action lawsuit, understanding this process is essential, particularly in intricate cases like those involving Fortrea lawsuit claims.
The Lead Plaintiff Deadline in the Fortrea Class Action Lawsuit
Lead plaintiff motions for the Fortrea class action lawsuit must be filed with the court no later than August 1, 2025. When a securities class action is filed:
- The person who files the first complaint is required to publish a notice announcing the filing.
- Anyone who wants to be the lead plaintiff on behalf of the class must thereafter file a motion to be appointed as lead plaintiff(s) no later than 60 days after the notice was published.
The Benefits of Serving as a Lead Plaintiff in the Fortrea Lawsuit
- Negotiating more competitive attorney fees and reducing litigation costs.
- Managing the litigation by overseeing the progress of the case and reviewing important filings.
- Participating in mediation and settlement discussions.
- Having a voice in decision-making processes regarding the settlement.
- No financial risk, as lead counsel covers all costs and expenses and are paid only if they secure a settlement or judgment recovery for the class
- Potentially enjoying long-term benefits from governance reform resulting from the litigation.
The Responsibilities the Lead Plaintiff Will Have in the Fortrea Lawsuit
- Selecting, monitoring, and overseeing Lead Counsel.
- Reviewing and commenting on court filings on behalf of the class.
- Discussing litigation strategies with the Lead Counsel.
- Attending depositions (if necessary) and giving a deposition.
- Attending hearings (if necessary).
- Participating in mediation and the trial (if necessary).
- Provide input on any decision concerning the settlement of the securities class action.
The Eligibility Criteria for Lead Plaintiff Appointment in the Fortrea Class Action Lawsuit
To be eligible for appointment as the lead plaintiff in the Fortrea class action lawsuit, an investor must meet the following criteria:
- Securities Acquisition: The investor must have purchased or acquired Fortrea Holdings Inc. (NASDAQ: FTRE) securities between July 3, 2023 and February 28, 2025.
- Financial Losses: The investor must have suffered financial losses as a direct result of the alleged securities fraud perpetrated by Fortrea and its executives.
- Typicality and Adequacy: The investor’s legal claims must be typical of those asserted on behalf of the class, and they must demonstrate their ability to adequately represent the interests of the entire class through experience, resources, and the absence of conflicts of interest.
It is crucial to note that both domestic and international investors who meet these criteria are eligible to seek appointment as the lead plaintiff in the class action lawsuit, as courts have consistently recognized the rights of non-U.S. investors in securities class actions.\
The Legal Requirements for Prevailing in the Fortrea Lawsuit
- Material Misrepresentation or Omission
- Scienter
- Connection to Securities Transaction
- Reliance
- Economic Loss
- Loss Causation
Opting-out of the Fortrea Class Action Lawsuit
Opting out of a class action lawsuit involves an individual choosing not to participate as a member of the class. In the context of the Fortrea class action lawsuit, this means that a shareholder or other affected party would decide to pursue their own separate legal action rather than be part of the collective lawsuit.
Opting out can be a strategic decision based on various factors such as the desire for greater control over the litigation process, potential for a larger individual settlement, or differing personal circumstances that may not align with the class’s claims.
When an individual opts out of a class action, they retain the right to file their own lawsuit against the defendant, in this case, Vestis. This decision must be made within a specified timeframe and in accordance with the procedures outlined by the court overseeing the class action.
It is essential for individuals considering this option to thoroughly evaluate their legal standing and consult with an attorney who can provide guidance tailored to their specific situation.
The Fortrea class action lawsuit, like many class actions, seeks to address grievances shared by a large group of plaintiffs who have been similarly affected by the company’s actions. While participating in a class action can streamline the litigation process and reduce individual legal costs, opting out allows for a more customized approach to seeking justice and compensation.
This decision should be made carefully, weighing the potential benefits and drawbacks in light of one’s unique circumstances and goals. If you have substantial losses, you may want to consider opting-out, but remember if you do, you will not be able to participate in any settlement in the Fortrea lawsuit.
Tips for Investors to Take to Protect their Interest in the Fortrea Lawsuit
Gathering and Organizing Relevant Evidence
In a securities class action lawsuit just like the Fortrea class action lawsuit, evidence is the cornerstone of building a compelling case. For shareholders, gathering and organizing relevant evidence is a critical step in substantiating claims of corporate misconduct. The evidence typically revolves around documents and communications that demonstrate the company’s misrepresentations or omissions, as well as the financial harm suffered by shareholders. Below are some steps you should take:
- Compile all financial statements, press releases, analyst reports, emails, and any internal documents that shed light on the alleged wrongdoing alleged in the Fortrea class action lawsuit.
- Meticulously document your investment history with the Fortrea, including dates of stock purchases and sales, quantities, and prices. This information is crucial for calculating damages and proving that the shareholder suffered financial losses as a result of the company’s actions.
- Maintaining detailed records not only strengthens the individual’s position in the lawsuit but also contributes to the overall strength of the Fortrea class action lawsuit, by providing a clear picture of the impact on shareholders.
- Organizing this evidence in a systematic manner is equally important. Shareholders can create a comprehensive file of all relevant documents, categorized by type and date, to facilitate easy retrieval and review by legal counsel.
By thoroughly gathering and organizing evidence, shareholders lay a solid foundation for holding corporations accountable and seeking redress for their financial injuries.
Staying Informed: Monitoring Case Developments
In the fast-paced environment of securities class action lawsuits, staying informed about case developments is crucial for shareholders. As the Fortrea class action lawsuit, moves forward, new information and events can significantly impact the strategy and potential outcomes. Fortrea shareholders must actively monitor key milestones, such as court rulings, settlement negotiations, and any changes in the legal landscape. Keeping abreast of these developments ensures that shareholders are well-positioned to make timely and informed decisions.
Effective communication with legal counsel is essential for staying updated on case developments. Attorneys provide regular updates and analyses of the ongoing proceedings, helping shareholders understand the implications of each development. This information is vital for assessing the potential risks and benefits of different courses of action, such as whether to accept a settlement offer or continue pursuing the Fortrea lawsuit.
By maintaining open lines of communication with their legal team, shareholders can remain engaged and proactive throughout the litigation process.
Shareholders can also benefit from following news sources and industry reports related to the Fortrea class action lawsuit and the defendant company. These sources can provide valuable insights into broader market trends, regulatory changes, and public perceptions that may influence the case. By staying informed, shareholders can better anticipate shifts in the legal and financial landscape, enabling them to adapt their strategies and protect their interests effectively.
In securities class actions, knowledge is power, and staying informed is a key component of successful participation.
Frequently Asked Questions About the Fortrea Lawsuit
What initiated the Fortrea lawsuit?
The lawsuit was initiated by investors alleging that Fortrea provided misleading information regarding its financial health and operations, resulting in financial losses.
How can I join the Fortrea lawsuit?
If you purchased shares during the class period and suffered a loss, then you are automatically a member of the class and do not need to do anything at this point unless you are considering moving for lead plaintiff.
What are the potential benefits of a Fortrea lawsuit?
Class action lawsuits allow individual investors to collectively seek justice and compensation, which might be challenging to pursue individually. They also promote corporate accountability.
How long will the Fortrea lawsuit take to resolve?
The duration of class action lawsuits can vary significantly, depending on the complexity of the case, legal strategies, and whether settlements are reached. It could take several months to years.
Contact Timothy L. Miles Today About a Fortrea Class Action Lawsuit
If you suffered losses in Fortrea stock, call us today for a free case evaluation about an Fortrea Class Action Lawsuit. 855-846-6529 or [email protected] (24/7/365).
Timothy L. Miles, Esq.
Law Offices of Timothy L. Miles
Tapestry at Brentwood Town Center
300 Centerview Dr. #247
Mailbox #1091
Brentwood,TN 37027
Phone: (855) Tim-MLaw (855-846-6529)
Email: [email protected]
Website: www.classactionlawyertn.com
