Last Friday, Toyota's stock closed at $79.56. That represents a 12-percent drop in market capitalization. For those keeping track, that's a loss of $15 billion. Naturally, there are a number of none-too-pleased shareholders hanging on to their stock in the Japanese automaker.
As such, it comes as little surprise that law firm Murray, Frank & Sailer has filed a class-action lawsuit in U.S. District Court in California on behalf of any and all shareholders who purchased stock between Dec. 22, 2009 and Feb. 2, 2010. The suit contends that Toyota issued "materially false and misleading statements" and "failed to disclose ongoing safety issues and quality control problems with Toyota's automobiles," especially issues related to alleged cases of unintended acceleration.
Would shareholders that purchased stock in Toyota have done so if the automaker had taken a more pragmatic stance on the problems it was about to face? It would seem that's up for a judge to decide.
Peter Henning, a Wayne State University law professor cited by The Detroit News, points out that securities cases are notoriously difficult to prove. "You are going to have to prove knowledge among the corporate management. Unless something else emerges, it seems that Toyota didn't think that it would be the kind of problem that it turned out to be," said Henning.
A three-judge panel is set to meet on Thursday to consider this and all other impending class action suits against the beleaguered automaker. Until then, Toyota certainly has its hands full with potential headache-inducing litigation to consider.
[Source: The Detroit News | Image: Junko Kimura/Getty]