KinderCare Learning Companies, Inc. (KLC) Securities Class Action

KinderCare is the largest provider of early childhood education in the United States. Over 30% of KinderCare’s revenues come from federal subsidies, primarily provided through the Child Care Development Fund, as authorized under the Child Care & Development Block Grant, a federal program that provides funding to states to assist low-income families with child care costs.

On October 8, 2024, KinderCare priced 27 million shares offered to investors in its IPO at $24 per share for total gross proceeds of $648 million. October 9, 2024, marked the first day of trading of the newly-public company’s common stock.

The lawsuit is focused on the propriety of KinderCare’s disclosures concerning the quality of its care and education that the company purportedly provided “throughout” its history, and the nature and magnitude of risks investors faced at the time of its IPO.

More specifically, KinderCare’s offering documents assured investors of the “unwavering” and “constant” “high-quality” care that the company’s teachers and employees provided to “each” student and their families, going so far as to describe the child care offered by KinderCare as “the highest quality care possible” and a “safe, nurturing and engaging environment.”

The complaint alleges that KinderCare’s IPO offering documents were false and misleading because they failed to disclose crucial information to investors, including that:

• numerous incidents of child abuse, neglect, and harm had occurred at KinderCare facilities;
• KinderCare did not provide the “highest quality of care possible” at its facilities, and, indeed, in numerous instances had failed to provide even basic care, meet minimum standards in the child care industry, or comply with the laws and regulations governing the care of children; and
• as a result, KinderCare was exposed to material, undisclosed risks of lawsuits, adverse regulatory actions, negative publicity, reputational damage, and business loss.   

Investors began to learn the truth on April 3, 2025, when The Bear Cave analyst, Edwin Dorsey, published a comprehensive, scathing research report. Dorsey said he found that “toddlers escape from the KinderCare daycares onto busy roads, are left alone locked inside KinderCare buildings and buses, and are physically, verbally, and sexually abused, with many cases going unreported until bystanders raise alarm or video evidence circulates.”

Then, on June 5, 2025, Dorsey published a second report observing that allegations against KinderCare are growing and that certain lawmakers are demanding the company’s accountability, with one reportedly tweeting “If you can’t keep children safe – and worse, are complicit in their abuse – you do NOT deserve a dime of taxpayer funding.”

Unsurprisingly, these and other revelations have driven the price of KinderCare shares substantially below the $24 IPO price. In addition, since going public, most recently on August 12, 2025, the company has reported disappointing financial results citing softening or declining enrollment.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the KLC investigation about?

We are concerned about KinderCare’s reported conduct, and investigating whether the company should have disclosed to its IPO investors its alleged failure to meet basic care standards.

WHAT SHOULD I DO?

I worked at KLC. What should I do?

If you were an employee of KLC, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in KLC, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any KLC investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.