TFI International's Legal Battle: Investors Face Crucial Deadline in Securities Fraud Lawsuit

Investors in TFI International Inc. (NYSE: TFII) are now at a critical juncture as a class action lawsuit alleging securities fraud nears its lead plaintiff deadline. The case, filed in the U.S. District Court for the Southern District of New York, accuses the company of misleading investors by hiding deteriorating financial health during a 10-month period. With just weeks remaining to apply for lead plaintiff status, stakeholders must weigh the risks and opportunities tied to this high-stakes legal battle.

The Allegations: A Pattern of Omissions

The lawsuit, spearheaded by Levi & Korsinsky, LLP, and other firms, claims that TFI executives concealed five key issues between April 26, 2024, and February 19, 2025:
1. Loss of key customers: Small and medium-sized businesses were abandoning the company, undermining its client base.
2. Declining TForce revenue: TFI’s LTL segment, which accounts for 43% of revenue, saw a significant drop in income.
3. Cost management failures: Rising operational expenses eroded profitability.
4. Profitability collapse: The company’s largest business segment, LTL, faced a steep decline in earnings.
5. Misleading statements: Despite these red flags, executives issued overly optimistic guidance about growth and financial health.

The trigger for the lawsuit came on February 19, 2025, when TFI reported a 33% year-over-year drop in Q4 net income to $88.1 million, alongside a 16% annual net income decline to $422.5 million. This revelation caused TFII’s stock to plummet 20.5%, closing at $101.48—a stark contrast to its pre-announcement price of $127.61.

The Financial Fallout

The lawsuit underscores a broader narrative of mismanagement. Key data points include:
- Q4 2024 operating income: Fell to $160.2 million, down from $198.3 million in 2023, driven by weaker freight demand and integration challenges from the Daseke acquisition.
- LTL segment struggles: U.S. LTL operating ratios worsened to 97.3% (vs. 91% in 2023), while Canadian LTL margins also tightened.
- Truckload inefficiencies: Excess Daseke trucks (6,888 units) led to underutilization, exacerbating cost pressures.

CEO Alain Bédard acknowledged the “deep recession” in freight markets, warning that 2025 would be “very difficult” due to weak demand and margin compression.

Investor Implications: The May 13 Deadline

The lawsuit’s class period—April 26, 2024, to February 19, 2025—targets investors who purchased TFII shares during this timeframe. Those seeking lead plaintiff status must file by May 13, 2025, to potentially influence litigation outcomes. Key considerations for investors:

1. Eligibility: Any investor who bought TFII shares during the class period qualifies, even if shares were sold at a loss.
2. Contingency Fees: Law firms operate on a no-win, no-fee basis, meaning plaintiffs pay only if there’s a recovery.
3. Case Timeline: Securities class actions typically take years, but early decisions on lead plaintiff selection and class certification will shape the case’s trajectory.

A Risky Wait or Strategic Move?

While TFI has maintained robust free cash flow ($768.6 million in 2024) and returned $75.6 million to shareholders in Q4 2024 via dividends and buybacks, the lawsuit introduces significant uncertainty. The Southern District of New York’s reputation as a hub for securities litigation suggests the case could face rigorous scrutiny.

Legal experts note that Levi & Korsinsky’s track record—including recoveries exceeding $1 billion for investors—bolsters the case’s credibility. However, outcomes hinge on proving TFI’s alleged omissions directly caused investor losses.

Conclusion: Weighing the Odds

With the May 13 deadline looming, investors holding TFII shares from April 2024 to February 2025 must decide whether to participate. The lawsuit’s success could hinge on demonstrating that TFI’s misstatements artificially inflated its stock price during the class period.

Crucial data points include:
- Stock Drop: A 20.5% decline on February 20, 2025, aligns with the timing of the financial disclosure.
- Net Income Decline: The 33% Q4 drop in net income underscores the severity of TFI’s operational challenges.
- Legal Precedent: The Southern District’s history of handling complex securities cases suggests the litigation could proceed swiftly.

For those who qualify, joining the lawsuit is a low-risk move. Even non-lead plaintiffs stand to benefit if a settlement or judgment is reached. With TFI’s shares still trading below pre-lawsuit levels (<$110 as of April 2025), the path forward remains fraught with uncertainty—but potentially lucrative for those who act before the deadline.

As the legal battle unfolds, investors would be wise to consult with their financial advisors to assess their options. The clock is ticking.