NEWTYN PARTNERS, LP; NEWTYN TE PARTNERS, LP, individually and on behalf of all others similarly situated v. ALLIANCE DATA SYSTEMS CORPORATION, nka Bread Financial Holdings, Inc.; CHARLES L. HORN; JOHN J. CHESNUT; RALPH J. ANDRETTA - Articles

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NEWTYN PARTNERS, LP; NEWTYN TE PARTNERS, LP, individually and on behalf of all others similarly situated v. ALLIANCE DATA SYSTEMS CORPORATION, nka Bread Financial Holdings, Inc.; CHARLES L. HORN; JOHN J. CHESNUT; RALPH J. ANDRETTA

Posted by: Azya Thornton on Jan 21, 2026

Court: 6th Circuit Court (Published Opinions)

Attorneys 1: ARGUED: Jonathan D. Lamet, SAXENA WHITE P.A., Boca Raton, Florida, for Appellants.

Attorneys 2: Charles S. Duggan, DAVIS POLK & WARDWELL LLP, New York, New York, for Appellees Alliance Data Systems Corporation and Ralph J. Andretta.

Attorneys 3: Peter A. Stokes, NORTON ROSE FULBRIGHT US LLP, Dallas, Texas, for Appellees Charles L. Horn and John J. Chesnut..

Attorneys 4: ON BRIEF: Jonathan D. Lamet, Lester R. Hooker, Dianne M. Pitre, SAXENA WHITE P.A., Boca Raton, Florida, Steven B. Singer, SAXENA WHITE P.A., White Plains, New York, for Appellants.

Attorneys 5: Charles S. Duggan, Matthew Drocton, DAVIS POLK & WARDWELL LLP, New York, New York, for Appellees Alliance Data Systems Corporation and Ralph J. Andretta. Peter A. Stokes, Michael A. Swartzendruber, NORTON ROSE FULBRIGHT US LLP, Dallas, Texas, for Appellees Charles L. Horn and John J. Chesnut.

Judge(s): THAPAR, READLER, and HERMANDORFER, Circuit Judges

Court Appealed: United States District Court for the Southern District of Ohio at Columbus

READLER, Circuit Judge. Facing mounting debt, Columbus-based Alliance Data Systems (ADS) spun off its LoyaltyOne division as a standalone company. As the spinoff was taking form, ADS executives pitched Loyalty to investors as a healthy business with long-term potential. But Loyalty was not without its challenges. In the months leading up to the spinoff, Loyalty’s crown jewel—its Canadian AIR MILES rewards program—began hemorrhaging clientele, culminating in the loss of its second largest customer a few months after the spinoff. And in the days ahead, those headwinds only grew stronger for Loyalty. Approximately a year and a half after the spinoff, Loyalty slid into bankruptcy, leaving investors in the red. Two funds within the investment firm Newtyn Management brought a class action on behalf of investors who, like Newtyn, purchased Loyalty’s stock, alleging securities fraud by ADS and three corporate executives. The district court, however, dismissed Newtyn’s complaint. To the district court’s mind, Newtyn both failed to explain in its complaint how defendants misled investors and failed to allege sufficiently defendants’ intent to do so. We agree and affirm.

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