ATLANTA, August 19, 2003 (PRIMEZONE) -- Chitwood & Harley announces that it has filed a class action lawsuit in the United States District Court for the Northern District of Texas, Dallas Division, on behalf of all purchasers of securities of Flowserve Corp., ("Flowserve" or the "Company") (NYSE:FLS), between October 23, 2001, and September 27, 2002, inclusive (the "Class Period"). The suit is brought against Flowserve Corp., C. Scott Greer, and Renee J. Hornbaker. The civil action number is 3:03-cv-1846-R. A copy of the complaint is available on our website, www.classlaw.com. If you have questions about this case, you may contact us through our website by clicking on Flowserve or by emailing or calling Jennifer Morris at jlm@classlaw.com or 1-888-873-3999 ext 6883.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between October 23, 2001 and September 27, 2002, thereby artificially inflating the price of Flowserve securities. During the Class Period, the Company alleges that Defendants, among other things: (a) misrepresented that the Company's aftermarket sales (the Company's "quick turnaround" business) were steady, stable and consistent streams of revenue; (b) misrepresented that the Company's growth made it less dependent upon the chemical and industrial segments, which had historically been very sensitive to economic downturn; (c) failed to disclose that the Company had instructed one or more of its plants to stop building inventory as a result of the projected (albeit undisclosed) continuing decline in sales; and (d) without any reasonable basis, projected full year 2002 earnings at ranges that were unattainable due to the declines the Company was experiencing in critical business segments.
On September 27, 2002, the Company warned of a 21% earnings shortfall for the quarter ending September 30, 2002, and cut its full year 2002 earnings guidance by over 60%, to $1.45 per share, from the $2.30 per share earnings guidance shared with investors during road show presentations promoting Flowserve's public offerings less than six months prior. Market reaction to the Company's announcement was swift and severe. Flowserve shares fell over 38% to close at $8.70 on September 27, 2002, a decline of more than 75% from the Class Period high of $34.90 reached on May 2, 2002. Prior to disclosure of the true facts, Flowserve completed two public offerings of its common stock, thereby raising more than $430 million, and Flowserve insiders sold their personally held Flowserve common stock for substantial profit.
The deadline to file lead plaintiff papers, for those class members wishing to serve in this capacity, is October 6, 2003. There are certain legal requirements to serve as lead plaintiff, which we would be happy to discuss with you. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may contact Lauren Antonino or Jennifer Morris at 1-888-873-3999 (toll-free) or by e-mail at jlm@classlaw.com. You may also contact us through our website, www.classlaw.com, by clicking on Flowserve, Corp.
Chitwood & Harley LLP is a class action firm that concentrates its practice in representing victims of securities fraud and corporate mismanagement, as well as other complex litigation. Chitwood & Harley has been appointed lead counsel in major actions throughout the United States and has been instrumental in recovering billions of dollars on behalf of its clients. Clients and courts alike have praised the results achieved by Chitwood & Harley. Recently, the federal judge in In re BankAmerica Securities Litigation, which resulted in the highest recovery last year in a securities class action, commented favorably on counsel's performance stating: "Class members were well served by experienced attorneys who, through considerable time and effort, obtained a significant recovery for their clients," and, "(a)s the Court has remarked throughout this litigation, class counsel ... have performed at exceptionally high levels, and all parties have been exceedingly well represented."
For more information about Chitwood & Harley, please visit our website at www.classlaw.com or contact Jennifer Morris at 1-888-873-3999 (toll-free), by e-mail at jlm@classlaw.com or at 1230 Peachtree Street, Suite 2300, Atlanta, Georgia 30309.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca