GFL Board Says Short Seller Analysis Flawed, Supports Management


The board of GFL Environmental Inc. said it reviewed a short-seller's report that questioned the waste hauler’s accounting methods and found it “deeply flawed,” standing by the firm’s management.

“The GFL board of directors stands 100% behind the company’s management team, strategy and focus on long-term shareholder value in the face of Spruce Point’s misrepresentation of the company’s public disclosures and their confusion about our industry and even basic accounting principles,” Dino Chiesa, lead independent director of the board of GFL, said in a statement Tuesday.

Last week, Spruce Point Capital Management LLC released a 107-page report that accused GFL of having an “aggressive and opaque business model” and claimed Chief Executive Officer Patrick Dovigi has “questionable” business connections. The allegations have not been proven.

Dovigi said on Aug. 18 the statements made by Spruce Point were “misleading” and contained factual errors, without specifying what they were. Shares of GFL plunged 14% in two days after the report was released.

GFL, based in Vaughan, Ontario, went public on March 3, just as a stock market sell-off sparked by Covid-19 was gaining momentum. Two previous attempts at IPOs had failed; among investor concerns were the company’s large debt level and spending on acquisitions.

In its statement today, the company said it closed a $750 million debt offering. “The notes offering also demonstrates that investors are aligned with our strategy, supportive of management and not easily swayed by the malicious innuendo and flawed analyses in Spruce Point Capital Management’s self-serving attack on the Company,” Dovigi said.

©2020 Bloomberg L.P.

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