#United States #New York #Pomerantz LLP #Securities Laws #Fortrea Holdings

Overview

The Pomerantz Law Firm has filed a significant class action lawsuit against Fortrea Holdings, Inc. and certain of its officers, as announced on June 27, 2025. This action, which takes place in the United States District Court for the Southern District of New York, affects all individuals or entities who purchased securities of Fortrea between July 3, 2023, and February 28, 2025. The intention is to reclaim damages stemming from alleged breaches of federal securities laws, particularly under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, along with Rule 10b-5.

Class Period Details

The lawsuit targets Fortrea's public disclosures during the stated Class Period. Investors are urged to act swiftly, as the deadline for appointing a Lead Plaintiff is set for August 1, 2025. Those who purchased Fortrea securities may obtain additional information and a copy of the filed complaint through Pomerantz's website or by contacting Danielle Peyton, an attorney involved in the case.

Background on Fortrea Holdings

Fortrea is a contract research organization (CRO) that provides development solutions for biopharmaceutical products and medical devices to a varied clientele, including pharmaceutical and biotechnology companies. The firm, which claims to support its customers with global scale and extensive expertise, transitioned into a standalone entity after being spun off from Labcorp Holdings Inc. in June 2023. This separation aimed to allow Fortrea more operational agility and focus on delivering life-changing therapies rapidly.

Transition Services Agreements

Following the spin-off, Fortrea and Labcorp entered into various transition service agreements (TSAs) to ensure continuity in operations. These agreements involved various support services, such as IT, marketing, and finance. However, Fortrea has since indicated its intention to exit the TSAs, suggesting that doing so would generate cost savings and enhance its operational margins.

Allegations of Misrepresentation

The class action alleges that throughout the Class Period, Fortrea's executives made numerous materially false and misleading statements. The claims include accusations that the company excessively estimated the potential revenue from its ongoing projects and overstated the anticipated cost savings from exiting the TSAs. As a result, the expectations surrounding Fortrea's EBITDA targets were reportedly inflated, misrepresenting the company’s true financial health to investors.

Impact of Analyst Reports

Compounding matters, various investment reports have contributed to investor skepticism regarding Fortrea’s financial viability. Notably, on September 25, 2024, Jefferies downgraded Fortrea, citing a perceived weakening in its business model amid broader pressures on biotechnology funding. Following this report, Fortrea’s stock price experienced a notable decline.

Concerns Over Financial Performance

Further concerns were highlighted when Baird Equity Research downgraded Fortrea due to the abrupt cancellation of scheduled investor conferences, leading to additional drops in share price. The situation worsened following the fourth quarter fiscal report from 2024, where Fortrea publicly acknowledged that its revenue and EBITDA projections were not meeting prior expectations, leading to another significant drop in stock value.

Recent Developments

Post-Class Period developments have not provided much solace for investors, as Fitch Ratings downgraded Fortrea, predicting a substantial fall in its EBITDA margins. This inevitable fallout raises serious questions about the company’s claims and the accuracy of their reported projections during the class action period.

Conclusion

The forthcoming class action case exemplifies ongoing investor dissatisfaction and the urgent need for accountability within public companies. With Pomerantz LLP’s extensive background in securities fraud litigation, this case could set important precedents. Investors who believe they qualify as part of the class should consider taking action promptly to ensure their rights are preserved within this significant legal battle.

For more information, interested parties are encouraged to explore Pomerantz's official site or reach out directly to the firm.