Flotek Industries Faces Class Action Following $400 Million Contract Loss

The legal action, filed in the U.S. District Court for the Southern District of New York, centers on allegations that Flotek failed to disclose significant risks regarding its partnership for the Puerto Rico Electric Power Authority (PREPA) project. While the company projected a $400 million revenue backlog from the deal, regulatory intervention under PROMESA Section 204 revealed deep-seated issues. On August 14, 2026, the Financial Oversight and Management Board for Puerto Rico voted to revoke the contract, citing a lack of required performance security and concerns over the consortium's technical capacity.

The lawsuit contends that Flotek’s public disclosures were misleading, specifically regarding the involvement of Enchanted Rock, LLC, and the viability of the project. Shares of Flotek (NYSE: FTK) dropped 6.85% on August 19, 2026, closing at $25.17, down from $35.83 just five days earlier. Attorney Joseph E. Levi noted that generic risk warnings provided by the company failed to address the specific, known operational problems that eventually led to the contract's collapse. Investors seeking to serve as lead plaintiff in the case must file their motions by October 26, 2026.