Collective Lawsuit Against Bio-On S.p.A

LOSS RECOVERY THROUGH LEGAL ACTION. FIND OUT IF YOU CAN JOIN US.

  • Instagram
  • Facebook
  • Twitter
  • LinkedIn
  • YouTube

Martingale Risk is forming a collective lawsuit against Bio-On S.p.A. The Bologna-based bio-plastic company and former unicorn, which created one of the most substantial bubbles in recent times. The bubble eventually popped with their bankruptcy issued by the Court of Bologna on Dec 20th, 2019 (sentence no. 137/19).Founded in 2007, Bio-On S.p.A. concluded an IPO on October 24th, 2014, listing 13,237,500 ordinary shares on the AIM Italian market at an initial price of EUR 5 per share.

 

The core of Bio-On's business model was the industrial production of a biopolymer (Minerv PHAs) that is 100% biodegradable in soil, fresh water and sea water. Claiming to be the first company in the world engaged in the production of such bio-plastics, Bio-On has over time issued several press releases announcing important partnerships and prospects for a substantial expansion of its business.

 

This may be illustrated through its series of announcements involving a variety of ambitious projects utilizing its bio-plastics in a variety of different sectors from medical, industrial, furniture production and skincare. Bio-On had claimed to be the owner of over 200 patents and patent applications, while in the patent registry of the Italian Ministry of Economic Development, only 2 patents were identified to be derived from the Company.

 

Bio-On's share price grew at a more than sustained pace, rising by around 150% during 2015 and over 350% between the period of 2014 to 2018. In July 2018, the share price reached an all-time high of approx. EUR 70 per share, amounting to a rise of 1,300% from the initial share price of EUR 5 in October of 2014 and officially exceeding EUR 1 Billion in capitalization

This growth was attributed to the publication of press releases and financial statements that were later confirmed to be fabricated and capable of causing a significant alteration in the price of financial instruments issued by Bio-On (in violation of Article 185 of Legislative Decree 58/1998, 'Market Manipulation'). On October 23rd, 2019, the Guardia di Finanza, at the instigation of the Public Prosecutor's Office of Bologna, seized assets worth more than EUR 150 million, notified precautionary measures for three managers and subjected six other Bio-On members to preliminary investigations on charges of false accounting and market manipulation (Article 185 of Legislative Decree 58/1998). The following day, Borsa Italiana S.p.A. indefinitely suspended the trading of the Company's shares

 

CASE MERITS

On December 20th, 2019, the Court of Bologna declared Bio-On S.p.A. bankrupt by judgment No 137/19.

 

Following the conclusion of the preliminary investigation (No. 11826/2019 R.G.R.N.), based on the results of the investigation activities carried out by the Guardia di Finanza and Consob, on April 29th, 2021 the Prosecutor's Office of Bologna requested the committal for trial (Articles 416, 417 of the Italian Criminal Code) of eight former members of Bio-On’s top management as well as of Company’s two external auditors Ernst and Young S.p.A (“E&Y”) and PricewaterhouseCoopers S.p.A (“PwC”).

 

According to Prosecutor's Office:

 

“By means of several executive actions of the same criminal plan, disseminated or in any event contributed to the preparation, also by means of omissive and compliant conduct, in breach of the supervisory and auditing duties false information on the economic and financial conditions of the company [... ], as a result of which there was an undue increase in the value of BIO-ON S.p.A. shares, from the placement price of 5.00 per share to values between 68.5 euros (as of November 2018) and 56.5 euros (as of July 2019)".

 

At the preliminary hearing of December 6th,2021, the Bologna Public Prosecutor's Office filed a request for committal for trial for the crime of so called improper fraudulent bankruptcy (Article 329 of Legislative Decree 14/2019) and abusive use of credit (Article 218 of the Bankruptcy Law). To conclude, at the hearing of February 28th,2022, the Judge for Preliminary Hearings, Dr. Maria Cristina Sarli, accepted the request to summon Ernst & Young S.p.A. and PricewaterhouseCoopers S.p.A. as civilly liable in their capacity as Bio-On's auditing firms, in addition to admitting as civil plaintiffs approximately 900 individuals and legal entities.

Our Proposal:

 

In light of the on-going penal persecution against the former top management of Bio-On, EY and PWC, we propose to file a collective lawsuit and individual suits on the investors’ behalf against Bio-On S.p.A’s auditors EY and PWC, which will be held at the Court of Rome and Court of Milan. The lawsuit is directed at obtaining a repayment of the damages incurred from investment losses in Bio-On S.p.A equities. Our firm is providing its services on solely a Success Fee equal calculated on the losses recovered from EY and PWC. We will pay all administrative and tax expenses incurred in the litigation, such as: notification and registration expenses for documents filed to the Court and any attorney fees or administrative expenses related to the experts eventually engaged by the Court. We will fully indemnify our clients from any adverse costs or any possible fees generated from the lawsuit.

Company :
Bio-On S.pA.

Relevant period :
30/03/2016 - 30/03/2019

ISIN:

IT0005056236

Contact person 

Peter Ogden 

Director - Head of Institutional Client Management