MINNEAPOLIS, Aug. 27, 2007 (PRIME NEWSWIRE) -- Lockridge Grindal Nauen P.L.L.P. commenced a class action lawsuit in the United States District Court for the Eastern District of New York on behalf of a class (the "Class") of all persons who purchased or acquired securities of American Home Mortgage Investment Company ("American Home" or the "Company") (Pink Sheets:AHMIQ) between July 26, 2006 and July 27, 2007 inclusive (the "Class Period").
The Complaint alleges that during the Class Period, the Company reported positive earnings and "strong" financial results and record loan originations. However, unknown to investors, the following adverse conditions were allegedly affecting the Company's business during the Class Period: (i) its risk mitigation strategies were materially defective, (ii) its financial results were materially overstated because the Company failed to write-down the value of certain of the loans in its portfolio, such as stated income loans, in violation of generally accepted accounting principles ("GAAP") as these loans had materially declined in value; and (iii) its financial guidance and promised cash dividend lacked any reasonable basis.
As alleged in the Complaint, on July 27, 2007, after the close of the market, American Home Mortgage disclosed that its Company's Board of Directors decided to delay payment of its quarterly cash dividend on the Company's common stock and that it anticipated delaying payment of its quarterly cash dividends on its Series A Cumulative Redeemable Preferred Stock and Series B Cumulative Redeemable Preferred Stock "in order to preserve liquidity until it obtains a better understanding of the impact that current market conditions in the mortgage industry and the broader credit market will have on the Company's balance sheet and overall liquidity."
In response to this announcement, it is alleged that on July 30, 2007, the NYSE halted trading in American Home Mortgage stock before the market opened and when trading resumed on July 31, 2007, the stock declined from $10.47 per share to close at $1.04 per share, a decline of $9.43 per share or approximately 90%.
If you purchased or otherwise acquired American Home Mortgage Investment Corporation securities during the Class Period, you may wish to join in the action to serve as lead plaintiff. You are not required to serve as lead plaintiff in order to participate in the class action. If you purchased American Home Mortgage securities during the Class Period, you may, no later than October 1, 2007, request that the Court appoint you as lead plaintiff.
If you have questions about the lawsuit or would like to discuss it with an attorney, please call or e-mail:
Karen H. Riebel, Esq. (khriebel@locklaw.com)
Lockridge Grindal Nauen P.L.L.P.
100 Washington Avenue South, Suite 2200
Minneapolis, MN 55401
(612) 339-6900
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca/