PACS Group, Inc. Securities Class Action Litigation

Introduction

Securities class action litigation has been filed on behalf of investors who purchased or otherwise acquired PACS common stock between April 11, 2024, and November 5, 2024, inclusive (the “Class Period”), including investors who purchased PACS common stock pursuant and/or traceable to the registration statements issued in connection with PACS’s April 11, 2024 initial public offering (“IPO”), and/or the Company’s September 6, 2024 secondary public offering (“SPO”).

If you purchased or otherwise acquired PACS securities during the Class, you may move the Court for appointment as lead plaintiff by no later than January 13, 2025. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. Your share of any recovery in the actions will not be affected by your decision of whether to seek appointment as lead plaintiff. You may retain Lieff Cabraser, or other attorneys, as your counsel in the action.

PACS investors who wish to learn more about the litigation and how to seek appointment as lead plaintiff should complete the form below, text or email investorinfo@lchb.com, or call Sharon M. Lee of Lieff Cabraser at 1-800-541-7358.

Background on the PACS Group, Inc. Securities Class Litigation

PACS, incorporated in California and headquartered in Farmington, Utah, is a holding company that, through its subsidiaries, operates senior care facilities, skilled nursing facilities, and assisted living facilities.

The actions allege that PACS made materially false and misleading statements and omissions throughout the Class Period, including in its IPO and SPO registration statements, and failed to disclose material adverse facts about its business, operations, and prospects, including: (1) that the Company conducted a “scheme” to submit false claims to Medicare which “drove more than 100% of PACS’ operating and net income from 2020 – 2023”; (2) that PACS conducted a “scheme” to “bill thousands of unnecessary respiratory and sensory integration therapies to Medicare”; and (3) that the Company conducted a scheme to falsify documentation connected with licensure and staffing. The actions assert claims under the Securities Act of 1933 and the Securities Exchange Act of 1934.

On November 4, 2024, Hindenburg Research published a report based on its five-month investigation that included interviews with 18 former PACS employees, competitors, and an analysis of over 900 PACS facility cost reports.

The report alleged that PACS had engaged in fraudulent practices, including: (1) abusing a COVID-era waiver to classify low-acuity patients as high-acuity and inflate Medicare reimbursements; (2) billing for unnecessary or nonexistent treatments, including respiratory and sensory integration therapies; (3) falsifying staffing documentation to inflate star ratings and avoid penalties; and (4) “renting” licenses to deceive regulators by borrowing credentials from third parties and employing unlicensed administrators or assigning administrators to manage facilities beyond state-mandated limits.

On this news, the price of PACS common stock fell $11.93 per share, or 27.78%, from its closing price on November 1, 2024 to close at $31.01 per share on November 4, 2024.

On November 6, 2024, the Company announced that it would postpone its third-quarter earnings release and disclosed that it had “received civil investigative demands from the federal government regarding the Company’s reimbursement and referral practices that may or may not be related to this week’s third-party report.” On this news, the price of PACS common stock fell $11.45 per share, or 38.76%, from its closing price on November 5, 2024 to close at $18.09 per share on November 6, 2024.