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La Quinta faces lawsuit over alleged securities law violations

La Quinta HoldingsInc. is facing a lawsuit over allegations that the company violatedsecurities laws.

The suit, filed in New York on behalf of certain investors, claimedthat La Quinta failed to disclose certain information in its filing related to itssecondary public offering, including that its key Texas market was experiencingdecreasing customer demand and that the transition of the company's call centerbusiness were causing disruptions.

The suit also alleged, among other things, that some of the company'sfacilities are outdated and require major renovation, causing the company to seelower customer demand and market share losses, according to the Shareholders FoundationInc.

Citing those allegations, the plaintiff argued that the company'sfuture operating results are adversely affected and that its 2015 guidance and thepositive statements about its then-current business and future financial prospects"lacked a reasonable basis."

La Quinta disclosed in March 2015 that certain selling stockholdersaffiliated with Blackstone Group LP commenceda secondary offering ofthe company's common shares.