A class action lawsuit was filed against KinderCare Learning Companies (KLC) by Levi & Korsinsky on August 12, 2025. The plaintiffs (shareholders) alleged that they bought KLC stock at artificially inflated prices during its IPO (initial public offering), which was on or about October 2024, and are now seeking compensation for their financial losses. Investors who bought KinderCare Learning stock during that period can click here to learn about joining the lawsuit.
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KinderCare Learning is among America’s largest providers of early child education (ECE) and childcare, serving children from six weeks to 12 years old. They operate more than 2,400 early learning centers and programs nationwide, offering community-based centers, before- and after-school programs, and employer-sponsored childcare.
KinderCare Learning’s claims about providing the “highest quality care possible” at its facilities are at the heart of the current complaint.
KinderCare Learning’s Misleading Claims
According to the lawsuit, KinderCare Learning, Partners Group, four investment banking houses, along with three of its current and/or former senior officers who signed the IPO, and seven of its directors are identified as Individual Defendants in the case. They are alleged to have negligently prepared the Registration Statement.
According to the complaint, none of the defendants did “a reasonable investigation” or had “reasonable grounds” to believe that the statements in the Registration Statement were valid as presented.
For instance, the Registration Statement described the “Four Pillars” that serve as the company’s foundation. These include duty to protect and nurture every child entrusted to them and maintaining stringent safety protocols in all classrooms through continual training and diligent monitoring.
Furthermore, KinderCare’s mission statement included building lifelong confidence by providing safe, high-quality early childhood and school-age education to families from diverse backgrounds. The organization was committed to giving each child the best possible start through exceptional educational experiences within a nurturing and engaging environment.
Finally, regarding classroom safety, the Registration Statement noted that the company enforces strict health and safety standards in all classrooms across more than 2,400 centers. Center directors provide regular safety training to staff to keep them updated on protocols and ensure compliance.
However, subsequent events (detailed below) revealed that the defendants had failed in numerous instances to provide even basic care, meet minimum standards in the childcare industry, or comply with the laws and regulations governing the care of children.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors through the Registration Statement, which contained untrue statements of important facts, but lacked corrective statements and legally required disclosures.
Importantly, the defendants failed to inform investors that numerous incidents of child abuse, neglect, and harm had occurred at KinderCare facilities.
After a series of partial disclosures, the information became clear on June 5, 2025, when a follow-up report appeared in The Bear Cave, an investigative newsletter and research platform.
The report stated that concerns about KinderCare were becoming widespread, with growing allegations and calls from lawmakers for accountability. A congresswoman questioned the continued federal funding, declaring that if the company cannot keep children safe or is complicit in abuse, it should receive no taxpayer money. Following the news, KLC stock dropped over 5% the same day.
To conclude, the defendants failed to inform investors that KinderCare was exposed to a material, undisclosed risk of lawsuits, adverse regulatory action, negative publicity, reputational damage, and business loss. Due to these issues, KLC stock has lost 62% so far this year.
