November 12, 2014
(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)
In the third quarter, several public companies begun disclosing risk factors related to the ongoing Ebola epidemic and the potentially adverse effects on their businesses. More issuers are updating their Form 10-Q reports for the third quarter as concerns about a further spread of the disease persist.
Concerns remain in travel industry
The travel industry has led the way in disclosing new Ebola-related risks, which is perhaps unsurprising considering the nature of their business.
Issuers such as Virgin America Inc., which is in the process of an initial public offering, updated the risk factors in their registration statements in light of the epidemic and its impact on discouraging consumers from traveling. Avolon Holdings Ltd., an aircraft leasing company also in the process of an IPO, disclosed similar concerns about the airline industry.
Most recently, new Ebola-related risk disclosures are showing up in the quarterly reports of other issuers in the travel and/or hospitality industries. MGM Resorts International, which owns and operates casino resorts, updated its third quarter Form 10-Q filing on Nov. 7 with similar disclosures, warning that “leisure and business travel” could be negatively affected by “the recent Ebola epidemic.”
Similarly, The Priceline Group Inc., which operates a platform that allows consumers to book discount travel specials, recently filed a Form 10-Q disclosing that its success could be limited by “travel related health concerns,” including “pandemics and epidemics such as Ebola.”