Acknowledging that class actions are often launched against public companies that experience stock drops, Meadowbrook Insurance Group nonetheless issued a press statement on Thursday to respond to a shareholder complaint filed a week ago.

“While we understand that it is not unusual for this type of complaint to be filed when a company experiences a material drop in the trading price of its shares, we believe that the complaint is inaccurate and the claims are entirely without merit,” Mike Costello, senior vice president, general counsel and secretary, said in a media statement.

“We emphatically reject any suggestion that the company or any of its officers violated the federal securities laws. Accordingly, we will vigorously defend ourselves and will pursue all remedies available to us in connection with this matter,” he added in the statement, which revealed that a class-action complaint had been filed against Meadowbrook and certain of its officers on Aug. 15, 2013 in the United States District Court for the Southern District of New York.

The complaint, filed by the law firm Pomerantz Grossman Hufford Dahlstrom & Gross LLP, alleges violations of federal securities laws during the period between July 30, 2012 and Aug. 8, 2013. In addition to naming Meadowbrook Insurance Group, the complaint names as defendants Robert S. Cubbin, Meadowbrook’s president and chief executive officer, and Karen M. Spaun, senior vice president and chief financial officer.

The beginning date of the class period is the end of the quarter before A.M. Best first put the “A-” financial strength ratings of the insurance subsidiaries under review with negative implications. That Oct. 19, 2012 announcement sent Meadowbrook shares tumbling 20 percent, according to the complaint.

When A.M. Best downgraded the ratings to “B++” on Aug. 2, 2013, Meadowbrook shares fell again, closing 10 percent lower on a trading volume of nearly nine-times the average daily volume, the complaint says. An Aug. 9 announcement from Meadowbrook that the company would not be able to file its quarterly 10-Q on a timely basis pushed Meadowbrook securities down another 2 percent.

At least a half-dozen law firms have separately issued press statements over the past week, encouraging investors to come forward.

Generally, the law firm statements include some version of the following summary contained in the class-action complaint and in the Pomerantz firm’s initial announcement of the filing, alleging that the defendants made false or misleading statements or failed to disclose that:

• The company’s financial stability was severely impaired.
• The company’s reported goodwill was materially inflated.
• The company’s capital position was not strong enough to support its ongoing insurance operations in a sustainable fashion.
• The company was in breach of its financial covenants applicable to its credit facilities.
• The company lacked adequate internal and financial controls, including controls over outstanding claims, asset impairment charges and maintenance of an appropriate capital position.

As a result, “the company’s statements were materially false and misleading at all relevant times,” the complaint alleges.

A day before the class-action complaint was filed, Meadowbrook announced it had estimated the impairment to goodwill resulting from the A.M. Best downgrade at $115.4 million.

Earlier this month, on Aug. 5, Meadowbrook announced that it had entered into an agreement with State National Insurance Co. to provide “A”-rated policies for a portion of its business.

Late last year, after A.M. Best placed Meadowbrook’s ratings under review in reaction to adverse loss development reported by the insurer, Meadowbrook took a series of corrective actions, including monetizing investments to boost capital, entering into a quota-share reinsurance arrangement with Swiss Re (ceding roughly $200 million of premiums on selected business) and terminating some underperforming books of business.