NEW YORK, Feb. 24, 2004 (PRIMEZONE) -- The deadline for purchasers of American Physicians Capital Inc. ("AP Capital" or the "Company") (Nasdaq:ACAP) publicly traded securities to move for lead plaintiff in a securities fraud class action recently brought against the Company is rapidly approaching. If you bought AP Capital publicly traded securities between February 13, 2003 and November 6, 2003, inclusive (the "Class Period") and you wish to be a lead plaintiff in the case, you must move to serve as lead plaintiff by filing a motion in the United States District Court for the Western District of Michigan by March 3, 2004. A copy of the complaint filed in this action is available from the Court, or can be viewed on the firm's website at http://www.cauleygeller.com/show_case.asp?ccode=216&pcode=10&pp=4.
The complaint, filed by a client of Cauley Geller Bowman & Rudman, LLP, alleges that defendants AP Capital Inc., William B. Cheeseman and Frank H. Freund violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. More specifically, the Complaint alleges that defendants failed to disclose and indicate (1) that the Company's provisions for loss reserves were inadequate; (2) that defendants failed to sufficiently increase the Company's loss reserves during the Class Period; and (3) as a result of the foregoing, the Company's operating results, an important metric used to value the Company's financial performance, were overstated at all relevant times.
On November 6, 2003, AP Capital shocked the market when it issued a press release announcing that its earnings release scheduled for that afternoon will be delayed until Wednesday, November 12, 2003 after the market closes. The Company further stated that it expects to announce a "substantial net loss" for the quarter due to significant adjustments in reserves for policy losses. The additional reserves are expected to approximate $43 million, before taxes ($28 million, net of tax). In addition, as a result of the net loss, the Company expects that, for the foreseeable future, it will not be able to report the deferred tax asset that results from its accumulated net operating losses and other timing differences. This will require the Company to incur a non-cash charge of approximately $50 million to establish a valuation allowance in order to eliminate the deferred tax asset. The Company also said it will discontinue offering workers' compensation and health care insurance, which account for about 30 percent of its premiums.
Upon this news, shares of the Company's stock fell 37%, or $10.34 per share, to close at $17.41 per share on extremely high trading volume.
If you bought AP Capital publicly traded securities between February 13, 2003 and November 6, 2003, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than March 3, 2004. If you are a member of this class, you can join this class action online at http://www.cauleygeller.com/template8.asp?pcode=6&pp=1. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Cauley Geller is a national law firm that represents investors and consumers in class action and corporate governance litigation. It is one of the country's premiere firms in the area of securities fraud, with in-house finance and forensic accounting specialists and extensive trial experience. Since its founding, Cauley Geller has recovered in excess of two billion dollars on behalf of aggrieved shareholders. The firm maintains offices in Boca Raton, Little Rock and New York.
If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's website at www.cauleygeller.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca