PHILADELPHIA, Sept. 19, 2002 (PRIMEZONE) -- Notice is hereby given that a class action lawsuit was filed on September 18, 2002, in the United States District Court for the Western District of Washington, on behalf of all persons and entities who purchased or otherwise acquired the common stock of Cutter & Buck, Inc. (Nasdaq:CBUKE) ("Cutter" or the "Company") between July 30, 2000 and August 12, 2002, inclusive (the "Class Period").
The action, numbered 02-CV-1972, is pending in the United States District Court, Western District of Washington, located at 212 U.S. Courthouse, 1010 Fifth Avenue, Seattle, WA, against defendants Cutter & Buck, Inc. and Harvey Jones. The Honorable Chief Judge John C. Coughenour is presiding over the case. A copy of the Complaint is available from the Court or the Law Offices Bernard M. Gross, P.C. Please visit our website at http://www.bernardmgross.com or contact us by phone at 866-561-3600 (toll free) or by E-mail at susang@bernardmgross.com.
The complaint charges Cutter & Bucker, Inc. and Harvey Jones, former Chief Executive Officer and Chairman of the Board, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, by issuing a series of materially false and misleading statements to the market during the Class Period. On July 30, 2000, the start of the Class Period, defendants issued and filed with the SEC Cutter's Form 10-K for FY 2000. Defendants reported Cutter's sales revenues and income for FY 2000 and improperly included in those reported figures the $5.8 million of improperly record revenue and resulting profit on those purported sales. The FY 2000 Form 10-K also included, in the footnote to the financial statements, the false statement that "(r)evenue is recognized at the time the product is shipped to the customer. There is no right of return for customers, other than for defective products." The complaint alleges that financial statements disseminated to the public were false and misleading because they improperly included as revenue $5.8 million of product that was shipped to three distributors on consignment, in violation of the basic principle of Generally Accepted Accounting Principles ("GAAP") that revenues cannot be booked if the product is shipped on consignment with a right of return. Thereafter, throughout the Class Period, defendants continued to improperly record the $5.8 million of product as revenue with each subsequently disseminated financial statement in violation of GAAP and failed to disclose their improper actions or that the sales revenues, and associated profit, would have to be reversed when the product was returned to Cutter. Upon the product return to Cutter, defendants, without making any disclosure, accounted for it as a reduction in sales in FY 2001 and improperly and intentionally misallocated the product to several of Cutter's business lines instead of the business line under which those sales were originally and improperly booked. These improper actions had the further effect of distorting the sales of Cutter's business lines. On August 12, 2002, the last day of the class period, defendants' improper actions were disclosed. Cutter's new Chief Executive Officer, Fran Conley, issued a press release disclosing the above alleged actions and that they would require a restatement of Cutter' s financial statements for FY 2000 and FY2001 as the result of improper revenue recognition and reacquisition of the consigned product by Cutter. Conley also announced that it is believed "(t)hat some members of the Company's former management may have received increased incentive compensation as a result of the overstated FY2000 financial results," and that a Special Committee had been appointed to investigate. Also on August 12, 2002, Cutter's Chief Financial Officer resigned. Upon the August 12, 2002 disclosures, Cutter's stock price fell $0.58 to $3.44 per share.
Plaintiff seeks to recover damages on behalf of Class members and, is represented by the law firm of Law Offices Bernard M. Gross, P.C. which has significant experience and expertise in prosecuting class actions and has recently filed cases involving the following securities:
COMPANY SYMBOL PURCHASED DURING LEAD PLAINTIFF
CLASS PERIOD FILING DEADLINE
Citigroup, Inc. C-NYSE 7/24/99-7/23/02 9/23/02
Eclipsys Corporation ECLP-NASDAQ 7/23/01-6/27/02 9/27/02
Insight
Enterprises, Inc. NSIT-NASDAQ 4/26/02-7/17/02 9/27/02
Duane Reade, Inc. DRD-NYSE 4/25/02-7/24/02 10/15/02
If you bought the common stock of Cutter between July 30, 2000 and August 12, 2002, you may, no later than November 12, 2002, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this Notice or rights or interests with respect to these matters,
PLEASE CONTACT: Law Offices Bernard M. Gross, P.C.
Deborah R. Gross, Esquire
Susan Gross, Esquire
1515 Locust Street, Second Floor
Philadelphia, PA 19102
Telephone: 866-561-3600 (toll-free)
or 215-561-3600
E-mail: susang@bernardmgross.com or
debbie@bernardmgross.com.
Website: http://www.bernardmgross.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca