CC INVESTOR ALERT

Bronstein, Gewirtz & Grossman LLC Announces that The Chemours Company Investors with Substantial Losses Have Opportunity to Lead Class Action Lawsuit! - Seite 2

According to the Company, the delay was necessary “because it needs additional time to complete its year-end reporting process” and “is evaluating its internal control over financial reporting . . . with respect to maintaining effective controls related to information and communications.” Chemours also revealed that it needed additional time for its Audit Committee to conduct a related internal review.

In response to this initial development, the price of Chemours common stock fell $3.85 per share, or more than 12%, from a close of $30.49 per share on February 13, 2024, to close at $26.64 per share on February 14, 2024.

Then, before the market opened on February 29, 2024, according to the Complaint, Chemours stunned investors when it announced that it was delaying the filing of its annual report for 2023 and that its Board of Directors (the “Board”) had “place[d] President and Chief Executive Officer Mark Newman, Senior Vice President and Chief Financial Officer Jonathan Lock and Vice President, Controller and Principal Accounting Officer Camela Wisel on administrative leave . . . pending the completion of an internal review being overseen by the Audit Committee of the Board of Directors with the assistance of independent outside counsel.”

According to the Company, the scope of the investigation “includes the processes for reviewing reports made to the Chemours Ethics Hotline” and Chemours’s “practices for managing working capital, including the related impact on metrics within the Company’s incentive plans [and] certain non-GAAP metrics” in the Company’s financial reports. Given the importance of these issues—not only to executive compensation, but also investors’ assessment of Chemours’s financial performance—the Company acknowledged that it “is evaluating one or more potential material weaknesses in its internal control over financial reporting as of December 31, 2023 with respect to maintaining effective controls related to the control environment, including the effectiveness of the ‘tone at the top’ set by certain members of senior management.”

In response to these revelations, the price of Chemours common stock plummeted $9.05 per share, or more than 31%, from a close of $28.72 per share on February 28, 2024, to close at $19.67 per share on February 29, 2024.

On March 6, 2024, after the end of the Class Period, Chemours announced that the Board’s Audit Committee concluded “that the members of senior management who were placed on administrative leave last week engaged in efforts in the fourth quarter of 2023 to delay payments to certain vendors that were originally due to be paid in the fourth quarter of 2023 until the first quarter of 2024, and to accelerate the collection of receivables into the fourth quarter of 2023 that were originally not due to be received until the first quarter of 2024.” Critically, “[t]he Audit Committee found that these individuals engaged in these efforts in part to meet free cash flow targets that the Company had communicated publicly, and which also would be part of a key metric for determining incentive compensation applicable to executive officers.” According to the Company, “[t]he Audit Committee review also determined that similar actions, though to a lesser extent, were taken in the fourth quarter of 2022, resulting in a significant increase in these cash flow measures for the quarter ended December 31, 2022, and a decrease in these measures in the first quarter of 2023.”