The lawsuit, Stuart v. FS KKR Capital Corp., alleges that the business development company misled shareholders by overstating the success of its portfolio restructuring and the accuracy of its investment valuations. According to the complaint, these misrepresentations extended to the durability of the company’s quarterly distribution strategy. The legal action follows a series of financial disclosures that triggered sharp declines in the company’s stock price.

In August 2025, FS KKR reported a significant drop in net asset value alongside a rise in non-accrual investments, causing an 8% slide in share price. By February 2026, the company announced further declines in asset value and a dividend cut to $0.48 per share. During the subsequent earnings call, management acknowledged deeper-than-expected challenges within legacy investments, including Medallia and Cubic Corp. This disclosure prompted a further 15% drop in the stock price. Robbins Geller Rudman & Dowd LLP is representing the class, urging investors with significant holdings to contact attorneys Ken Dolitsky or Michael Albert to participate in the litigation process.