LITTLE ROCK, Ark., Feb. 18, 2005 (PRIMEZONE) -- Emerson Poynter LLP (www.emersonpoynter.com), a national law firm with offices in Houston, Little Rock, and Seattle, announced today that it has filed in the United States District Court for the Southern District of New York on behalf of purchasers of Tower Automotive, Inc. ("Tower Automotive") (NYSE:TWR) common stock during the period between February 14, 2003, and January 21, 2005 (the "Class Period").
The complaint charges certain of Tower Automotive officers and directors with violations of the Securities Exchange Act of 1934. Tower Automotive is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer. On February 2, 2005, the Company filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the Southern District of New York and, therefore, the Company is not named as a defendant.
The complaint alleges that, during the Class Period, defendants failed to disclose and/or misrepresented the following adverse facts, which were known to defendants, or recklessly disregarded by them, at all relevant times: (a) that the Company was facing increasing pressure from automakers to dramatically lower its prices in order to offset incentives that automakers were having to provide in order to remain competitive; (b) that the costs of steel and other raw materials were continuing to rise and would do so in the future, thereby increasing expenses and, when combined with the squeeze being placed on the Company by automakers, dramatically decreasing the Company's earnings ability. To the extent that Tower purported to warn of the impact of rising materials' prices, those warnings were generic in nature and did not advise investors of the full extent of the risks and uncertainties faced by the Company as a result of rising materials' prices; (c) that early pay programs that had been instituted by automakers in 2001 which enabled automakers to pay suppliers early for products and therefore get a discount were going to be terminated, thereby depriving the Company of a primary source of its liquidity; (d) based on the foregoing, contrary to Defendants' representations, the Company's financial condition was declining precipitously such that the Company was nearing insolvency and would have to file for bankruptcy; and (e) based on the foregoing, defendants had no reasonable basis for their positive statements regarding the Company's ability to control its liquidity issues. Then, on January 20, 2005, the Company issued a press release announcing that longer-than-anticipated holiday shutdowns at certain key customers will reduce liquidity by $40 million during the first quarter of 2005. On the following trading day, Standard & Poor's ("S&P") slashed its rating on Tower Automotive saying that the Company may have to restructure its finances unless business improves over the next two quarters. S&P cut Tower Automotive's corporate credit rating by three notches to the deeply speculative "CCC" level from "B." Market reaction to these announcements was swift and severe. On January 21, 2005, shares of Tower Automotive common stock closed at $0.75 per share, a decline of $1.61 per share, or almost 70%, from its close on January 19, 2005.
If you purchased or otherwise acquired the common securities during the Class Period you may, no later than April 5, 2005 move the Court to appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. 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. You may retain Emerson Poynter LLP or other counsel of your choice.
Emerson Poynter LLP has substantial experience representing shareholders and investors in complex class action securities, consumer, and retirement plan litigation all over the country. A complete firm resume is posted on out website (http://www.emersonpoynter.com/resources/firmresume.pdf).
If you are a member of the Class please contact Emerson Poynter LLP. You may contact our shareholder relations department via email (epllp@emersonpoynter.com) or by calling 1-800-663-9817.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca