NEW YORK, June 15, 2004 (PRIMEZONE) -- Wolf Popper LLP has filed a securities fraud class action complaint against Key Energy Services, Inc. ("Key" or the "Company") (NYSE:KEG) and four of its senior officers on behalf of purchasers of Key securities from February 13, 2003 through June 4, 2004, inclusive. A copy of the complaint is available from the U.S. District Court for the Western District of Texas, and on Wolf Popper's website (www.wolfpopper.com).
Plaintiff alleges that the defendants misrepresented Key's operating results and financial condition to public investors by (a) misrepresenting the assets reported on Key's balance sheet; (b) improperly inflating net income and earnings per share, in contravention of generally accepted accounting principles; (c) failing to disclose that the accounting improprieties posed material risks to Key's liquidity, because a restatement would likely -- and did -- cause the Company to default on its long-term debt agreements; and (d) failing to disclose that Key lacked any reasonable basis for its earnings forecasts and statements about liquidity.
The true facts were partially revealed on March 15, 2004, when Key surprised the market by disclosing that it would not meet the deadline for filing its annual report with the Securities and Exchange Commission because it had not yet completed a review of "certain idle equipment" to determine impairment. Key further acknowledged that the review might result in a revision to its previously announced 2003 earnings. On March 29, 2004, Key announced a further delay in the filing of its annual report, and disclosed that it would have to restate its financial statements because, in one or more prior years, the Company had failed to write-down as much as $78 million of assets, which consisted predominantly of idle equipment. However, Key continued to reaffirm its earnings forecasts and reassure public investors about its liquidity.
On June 7, 2004, Key announced that, as a result of the delay in filing its annual report due to the restatement, it had received a notice of default under its senior notes -- under which it had approximately $425 million of outstanding obligation. Key further stated that, as a result of the uncertainties affecting the Company, the Company "is withdrawing earnings forecasts for fiscal 2004."
The above disclosures caused the Company's stock price to decline from its opening of $12.80 on March 15, 2004 to its low of $7.00 on June 7, 2004 -- a 45.31% decline, causing significant aggregate damage to the investing public.
Wolf Popper has extensive experience representing shareholders in class actions and has successfully recovered billions of dollars for defrauded investors and shareholders. The reputation and expertise of the firm in shareholder and other class action litigation have been repeatedly recognized by the courts, which have appointed the firm to major positions in complex multi-district and consolidated litigations.
Any member of the class (who purchased Key securities during the period February 13, 2003 through June 4, 2004, inclusive) who desires to be appointed lead plaintiff in the class action must file a motion with the Court no later than August 10, 2004. Class members must meet certain legal requirements to serve as a lead plaintiff. If you have questions or information regarding this action, or if you are interested in serving as a lead plaintiff, you may call or write:
Wolf Popper LLP, Michael A. Schwartz, Esq. 845 Third Avenue, New York, NY 10022-6689 Tel.: 212.451.9668, Toll Free: 877.370.7703; Fax: 212.486.2093, Toll Free: 877.370.7704 Email: irrep@wolfpopper.com; website: www.wolfpopper.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca