Soreide Law Group is reviewing investor claims against securities brokers or financial advisors who possibly improperly sold investments in Diamond Offshore Drilling, Inc. (NYSE: DO), an oil company based in Houston, Texas. Namely, on April 27, 2020, the company filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas.
Who Is Diamond Offshore Drilling?
Diamond Offshore Drilling is an oil company with 2,500 employees who provides contract drilling services around the world. Evidently, the company has a fleet of 15 offshore drilling rigs comprised of drillships and semisubmersibles.
Diamond Offshore Drilling Accrues Big Losses, Debts
Evidently, Diamond Offshore Drilling had been facing serious financial problems long before the COVID-19 pandemic. Reportedly, the company amassed $357,000,000 in losses in 2019. Even worse, it experienced approximately $1,200,000,000 in losses in the last five years alone. Evidently, problems became even more apparent when the company skipped paying a semiannual interest payment on April 15. As of the close of business on April 24, 2020 – DO’s last day of trading on NYSE – shares fell to $0.94. Notably, DO closed at $11.88 on April 24, 2019. In just twelve months, DO lost 92% of its value.
Diamond Offshore Drilling Files For Bankruptcy
The company filed for Chapter 11 bankruptcy protection on April 27th. As of December 31, 2019, it apparently had $2,000,000,000 in debt and about $156,000,000 in cash on hand. Apparently, its largest shareholder is Loews Corp. and its largest creditor is Bank of New York Mellon. Not surprisingly, the company claimed that its struggling financial state was exacerbated by sharp reductions in oil demand because of COVID-19. The company also referenced problems stemming from a price war between Russia and OPEC. Also, the bankruptcy filing comes at a time when oil futures dropped below $0 for the first time.
Financial Advisors Possibly Made Unsuitable Recommendations
Critically, financial advisors could have recommended for clients to purchase investments in Diamond Offshore Drilling without disclosing risks and without considering their clients’ goals, risk tolerances, financial needs and other factors relating to the clients’ investment profiles. Also, it is possible that financial advisors inappropriately pushed energy sector investments like DO onto their more conservative client base because of the prospects of high returns. Unfortunately, energy sector investments can be very volatile and have generated serious losses for investors as of late. It appears that some investors could have sustained big losses by investing in DO.
Losses From Investing In Diamond Offshore Drilling?
Experienced losses by investing in Diamond Offshore Drilling because of your financial advisor? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The law firm has recovered millions of dollars for clients who have suffered losses due to misconduct of brokers and brokerage firms.