{"id":9934,"date":"2023-05-17T10:28:57","date_gmt":"2023-05-17T14:28:57","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/norfolk-southern-bondholders-sue-over-safety-disclosures-preceding-ohio-derailment\/"},"modified":"2023-05-17T10:28:57","modified_gmt":"2023-05-17T14:28:57","slug":"norfolk-southern-bondholders-sue-over-safety-disclosures-preceding-ohio-derailment","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=9934","title":{"rendered":"Norfolk Southern bondholders sue over safety disclosures preceding Ohio derailment"},"content":{"rendered":"
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\u00a9 Reuters. FILE PHOTO: A Norfolk Southern train rests near the University of North Carolina’s energy generation plant, after delivering coal to the facility, in Chapel Hill, North Carolina, U.S. August 11, 2022. REUTERS\/Jonathan Drake<\/span>
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By Jonathan Stempel<\/p>\n

NEW YORK (Reuters) – Norfolk Southern <\/span><\/span> Corp (NYSE:) was sued on Tuesday by bondholders who said they lost hundreds of millions of dollars because the railroad concealed safety risks prior to the February derailment in Ohio of a train carrying hazardous chemicals.<\/p>\n

The proposed class action filed in Manhattan federal court covers investors who own $4.75 billion of Norfolk Southern senior notes and bonds from eight offerings between Aug. 2020 and Jan. 2023.<\/p>\n

Bondholders said Norfolk Southern is strictly liable for having in offering prospectuses touted its focus on safety and downplayed the risks of “Precision Scheduled Railroading,” which employs longer and heavier trains that require fewer workers.<\/p>\n

The disclosure shortfalls made buying the bonds “speculative or risky,” which was borne out as prices fell, the complaint said.<\/p>\n

One offering, a 2.9% bond maturing in Aug. 2051, fell to below 63 cents on the dollar from about 70 cents within one month of the Feb. 3 derailment, Refinitiv data show.<\/p>\n

A Norfolk Southern spokesman declined to comment, saying the Atlanta-based company does not discuss pending litigation.<\/p>\n

Most large U.S. freight railroads use Precision Scheduled Railroading.<\/p>\n

Norfolk Southern faced many lawsuits over the derailment in East Palestine, Ohio, including cases brought by Ohio’s attorney general, local residents and shareholders.<\/p>\n

Bondholder lawsuits over disclosure failures are less common than shareholder lawsuits, but can be brought if estimated losses are high.<\/p>\n

The derailment released more than 1 million gallons of hazardous materials and pollutants into the environment, and the U.S. Environmental Protection Agency ordered Norfolk Southern to clean up the contamination.<\/p>\n

Last month, Norfolk Southern took a $387 million charge for the derailment, excluding expected costs for damage to property values, water and people’s long-term health.<\/p>\n

Tuesday’s lawsuit was filed by pension funds in Ohio and Michigan. There are nearly 30 defendants, including Norfolk Southern executives and directors and 12 financial services companies that underwrote the bonds. <\/p>\n

The case is Ohio Carpenters Pension Fund et al v Norfolk Southern Corp et al, U.S. District Court, Southern District of New York, No. 23-04068. <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. FILE PHOTO: A Norfolk Southern train rests near the University of North Carolina’s energy generation plant, after delivering coal to the facility, in Chapel Hill, North Carolina, U.S. August 11, 2022. REUTERS\/Jonathan Drake By Jonathan Stempel NEW YORK (Reuters) – Norfolk Southern Corp (NYSE:) was sued on Tuesday by bondholders who said they […]<\/p>\n","protected":false},"author":1,"featured_media":1983,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-9934","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nNorfolk Southern bondholders sue over safety disclosures preceding Ohio derailment | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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