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Pomerantz Law Firm Initiates Class Action Against BigBear.ai Holdings

On May 26, 2025, Pomerantz LLP, a prominent law firm, revealed that a class action lawsuit was filed against BigBear.ai Holdings, Inc. and certain executives. This legal action arises from allegations that the company misled investors about its securities from March 31, 2022, to March 25, 2025. The lawsuit aims to recover damages for all individuals and entities who acquired BigBear securities during this period due to alleged violations of the federal securities laws.

Background on BigBear.ai

BigBear.ai is recognized for its application of artificial intelligence in providing technology solutions, particularly in national security, supply chain management, and digital identity solutions. The firm made headlines in June 2021 when it merged with GigCapital4, Inc., a special purpose acquisition company, in a significant business combination. This merger resulted in the rebranding of GigCapital4 as BigBear.ai Holdings, Inc. following a sequence of mergers that successfully completed by December 7, 2021, which also marked the issuance of $200 million in unsecured convertible notes, due on December 15, 2026.

The Allegations

The class action claims that during the specified class period, the defendants made materially false statements regarding the company's financial condition and internal control procedures. They allegedly failed to disclose significant accounting deficiencies related to the handling and reporting of non-routine and complex transactions. Specifically, the complaint highlights key issues:

1. Improper Accounting Treatment: BigBear failed to bifurcate the conversion option included in its 2026 Convertible Notes as required by the relevant accounting standards (ASC 815-15). The company erroneously deemed these options eligible for a scope exception, neglecting critical details that necessitate proper accounting as derivatives.

2. Misrepresentation of Financials: The lawsuit alleges that BigBear’s financial statements issued since fiscal 2021 contained inaccuracies due to its faulty accounting practices. This misrepresentation of its liabilities and equity necessitated restatements of previously issued financial reports.

3. Impact on Securities: The discrepancies led to a series of financial disclosures that negatively impacted BigBear's stock. Following revelations about the need for restating its financial statements, the stock experienced significant declines, further suggesting that the company's public representations were misleading.

Subsequent Developments

The seriousness of the allegations increased when, on March 18, 2025, BigBear disclosed that certain financial statements could no longer be relied upon, revealing a significant miscalculation regarding its 2026 Convertible Notes' accounting treatment. This announcement triggered a stock price drop of almost 15%. Subsequently, in a later SEC filing on March 25, 2025, BigBear acknowledged the misclassification of the conversion option, stating it required bifurcation as a derivative and contradicted its previous accounting rationale.

Engaging with the Court

For investors affected by the alleged mismanagement, Pomerantz is offering an opportunity to approach the court with an application to become a Lead Plaintiff in the case, with the deadline set for June 10, 2025. Interested parties can consult with the firm directly for case details and further inquiries.

About Pomerantz LLP

Pomerantz LLP is well-regarded in the legal community for its involvement in corporate and securities litigation. Established by Abraham L. Pomerantz, the firm has pioneered the securities class action arena and has secured billions in damages on behalf of investors. With offices in major cities globally, Pomerantz continues to uphold its legacy of protecting investor rights against corporate misconduct.

For those interested in joining this class action or learning more about the lawsuit, a copy of the complaint is accessible through the Pomerantz Law Firm’s website.

Contact:

• - Danielle Peyton
• - Phone: 646-581-9980
• - Email: [email protected]