Dallas, Texas 10/31/2013 (Financialstrend) – Nuverra Environmental Solutions, Inc. (NYSE:NES) is a $579 million market capped company which offers waste management solutions to its customers. The firm has been struggling to sustain its operations due to sever crunch in cash flow. In order to alleviate the situation, the company on September 27 announced that it has entered into a understanding with the consortium of lenders led by Wells Forgo Bank to amend the terms of its revolving credit. This agreement has been in vogue since 2012. As per the reworked terms of the loan, the deadline for the firm to furnish the title documents of real estate assets which are required for covering part of the credit under mortgage has been extended. More importantly the “Maximum debt leverage ratio” has also been redefined in order to allow the firm to avail more credit within the purview of the revolving loan. The relief the company has got from access to additional credit is short lived since a host of share holders of the stock have launched class action suit against the directors and the board of the firm.
On October 28 one such law firm Levi & Korsinsky which claims to represent few of the affected investors announced that the “class action lawsuit” it had lodged against Nuverra Environmental Solutions, Inc. (NYSE:NES) has been initiated at the “United States District Court for the District of Arizona”. The complaint states that the firm intentionally misrepresented facts about the ground realities the company was facing to its prospective investors. The alleged misrepresentations include not disclosing the sequential “decline in its operational results” the company was facing due to which the firm is on the verge of defaulting on its loan obligations. Based on how the legal challenge progresses, the stock might manage to regain some of its lost ground.