A U.S. law firm is taking the first steps to launch a class action lawsuit on behalf of shareholders against Neptune Technologies et Bioressources Inc, the factory in Sherbrooke Que. where an explosion killed three people last month
The Nov. 8 blast killed three people and injured 18 others. A tank of acetone, which is a highly flammable solvent, is believed to have been the source.
In November, Radio-Canada reported that the quantity of acetone being stored inside the factory was higher than what was authorized by the Quebec Environment Ministry.
A New York law firm, Robbins Geller LLP, is building a class-action lawsuit against the company to seek damages on behalf of company stockholders.
The suit alleges that Neptune, along with some of its officers and directors, violated U.S. law.
It claims that Neptune failed to disclose key information about its Sherbrooke facility, in violation of the Securities Exchange Act of 1934.
A statement released by Robbins Geller alleges that Neptune "issued materially false and misleading statements regarding the company's operational status and financial projections."
The claim goes on to say that officials failed to disclose that they had installed larger acetone storage tanks at the plant, which stored "dangerously high levels of acetone" exceeding those permitted by the environment ministry.
The complaint also alleges that the company did not have government permission for the plant's expansion project, which was underway when the explosion occurred.
"There is absolutely no foundation for what this legal class action refers to," said André Godin, Neptune's chief financial officer.
Godin said the company is in the process of hiring legal counsel in the U.S. to defend the company and its directors against claims that he called "completely false."
According to a statement released by the law firm, Neptune stock "plunged" after the explosion to 32 per cent of its closing price the evening before the incident.