U.S. Xpress close to putting investor lawsuit behind

U.S. Xpress is on the verge of putting a 4-year-old class action lawsuit behind, clearing the way for the company to be acquired by Knight-Swift Transportation.

A stipulation of settlement agreement was filed in late March in the U.S. District Court of Eastern Tennessee Chattanooga Division.

Chattanooga, Tenn.-based U.S. Xpress Enterprises Inc. agreed to pay $13 million to resolve a class action lawsuit brought by investors. They claimed in a 2019 lawsuit that the company made “materially misleading” financial statements leading up to the company’s 2018 initial public stock offering. The company raised nearly $250 million from the initial public stock offering.

Plaintiffs in the litigation alleged that, beginning in June 2018, U.S. Xpress made false and misleading statements and/or failed to disclose adverse information regarding the company’s business and operations. That caused the price of the company’s securities to trade at artificially inflated prices until November 2018, when the alleged misinformation was brought to light. Then the company’s stock price dropped significantly.

As part of the settlement, U.S. Xpress admits no wrongdoing.

“Defendants expressly have denied, and continue to deny, that they have committed any wrongdoing or violations of law as alleged in any complaint in the litigation, and maintain that their conduct was at all times proper and in compliance with applicable provisions of law and applicable industry standards,” reads part of the stipulation of settlement agreement.

Read the stipulation of settlement agreement, uploaded to Scribd by Dan Lehr of WTVC, here.

Last month, Phoenix-based Knight-Swift Transportation announced its intent to buy U.S. Xpress for $6.15 per share, about $808 million. The share price was 310% of the company’s closing stock prices on March 20.

In its first quarter 2023 earnings statement, Knight-Swift announced its acquisition of US Xpress is expected to close in early third quarter 2023. Knight-Swift said it expected the acquisition to be beneficial when the freight market improves.

“While the current freight environment continues to be challenging, we are already positioning ourselves to prepare for the impending freight recovery, including the announced transaction to acquire U.S. Xpress later this summer, for which we are uniquely qualified and experienced to meaningfully improve results through the next phase of the cycle,” David Jackson, Knight-Swift CEO, said in the earnings statement. LL

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