NEW YORK, June 28, 2005 (PRIMEZONE) -- The law firm of Wechsler Harwood LLP ("Wechsler Harwood") announced that it filed a class action lawsuit on June 27, 2005 in the United States District Court for the District of Minnesota on behalf of purchasers of the securities of Navarre Corp. ("Navarre" or the "Company") (Nasdaq:NAVR) between July 23, 2003 and May 31, 2005, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act") against defendants Navarre, Eric H. Paulson ( Navarre's chief executive officer, president and chairman) and James Gilbertson (Navarre's chief financial officer).
The Complaint alleges that throughout the Class Period defendants continually reported record results for the Company every quarter that were supposedly achieved by successful execution of Navarre's business strategy. However, these representations concerning the Company's financial results and its business were materially false and misleading for the following reasons: (a) defendants had materially inflated Navarre's reported income by failing to properly recognize expenses relating to executive deferred compensation; (b) defendants' apparent success was principally attributable to improper accounting; (c) The Company's financial results, reported in press releases and SEC filings were not, contrary to defendants' express representations, prepared in accordance with generally accepted accounting principles; (d) the certifications signed by defendants Paulson and Gilbertson in Navarre's SEC filings, which attested to the purported accuracy of the financial results included therein, were false because the financial results were artificially inflated through improper accounting; (e) during the third fiscal quarter of 2005, Navarre improperly recognized millions of dollars in deferred tax benefits as income; and (f) Navarre was actually -- contrary to its representations -- experiencing a significant slowdown in demand for its anti-virus software products that was materially and negatively impacting its overall business.
On May 31, 2005, Navarre issued a press release announcing that it would postpone release of the Company's fourth quarter and fiscal year 2005 results pending an accounting review focused on the recognition of deferred compensation expense for payments made to defendant Paulson and the classification of fiscal 2005 tax items. In response to this announcement, the price of Navarre common stock dropped from $9.00 per share on May 31, 2005 to $8.02 per share on June 1, 2005, a one-day drop of 10.8% on unusually heavy trading volume.
The Complaint further alleges that defendants were motivated to commit the alleged wrongdoing in order that Navarre insiders, including defendants Paulson and Gilbertson, could sell their personally held Navarre shares at artificially inflated prices. The Complaint alleged that during the Class Period, insiders sold a total of 1,269,000 shares, for total proceeds of $16,183,254.58.
If you bought the securities of Navarre between July 23, 2003 and May 31, 2005 and sustained damages, you may, no later than August 12, 2005, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members and that the class member will adequately represent the class. Under certain circumstances' one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. 78u-4).
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter.