NEW YORK, March 6, 2002 (PRIMEZONE) -- Please take notice that the law firm of Kirby McInerney & Squire, LLP has commenced a class action lawsuit in the United States District Court for the District of New Jersey on behalf of all purchasers of Medi-Hut (Nasdaq:MHUT) common stock during the period from April 4, 2000 through February 4, 2002 (the "Class Period").
A copy of the complaint is available from the Court or from Kirby McInerney & Squire. Please visit the Website, which offers summary and detailed information concerning the case at www.kmslaw.com/new_cases/medihut/medihut.htm, or contact us by phone at (888) 529-4787 or by email at obraun@kmslaw.com.
The action charges Medi-Hut, as well as six of its senior officers including its Chief Executive Officer and Chief Financial Officer, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. These violations, the complaint alleges, stem from defendants' materially false and misleading statements during the Class Period that, as detailed below: (i) misrepresented the Company's business, operations and financial performance; and (ii) caused the Company's shares to trade at artificially-inflated prices.
Specifically, the complaint alleges that Medi-Hut misled the investing public by failing to disclose that a Medi-Hut vice president, Lawrence Marasco, had a controlling interest in Larval Corp. ("Larval") -- the Company's largest customer. During fiscal year 2001, sales to Larval accounted for 62% of Medi-Hut's revenues. Because Marasco had a controlling interest in one of Medi-Hut's customers, generally accepted accounting principles ("GAAP") dictated that Medi-Hut identify sales to that customer as related party transactions. Defendants, however, failed to disclose the true nature of Medi-Hut's sales to Larval. Indeed, each report Medi-Hut filed with the Securities and Exchange Commission during the Class Period, including quarterly and annual reports, was devoid of any reference to the fact that one of its largest customers was controlled by a Medi-Hut employee. The complaint alleges that the misrepresentations and omissions by defendants influenced the views of stock market analysts and the investing public and brought about an unrealistic assessment of the Company's performance and prospects; and that, as a result, Medi-Hut's stock traded at artificially inflated prices throughout the Class Period.
On February 4, 2002, the nature of the relationship between Medi-Hut, Marasco and Larval Corp. was revealed to the market. The investing public, recognizing that a majority of Medi-Hut's revenues in fiscal year 2001 were generated via sales to a related party, reacted swiftly and severely. By the close of business on February 4, shares of Medi-Hut had lost 51% of their value, falling $3.41 per share to $3.29 in unusually heavy trading. Four days later, Grant Thornton LLP resigned its position as Medi-Hut's independent auditor, only two weeks after having secured that position.
Plaintiffs are represented by Kirby McInerney & Squire, LLP, which specializes in complex litigation, including securities class actions. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and its achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general or about the role of the lead plaintiff in a securities class action can be obtained through Kirby McInerney & Squire's Website at www.kmslaw.com.
If you are a member of the class described above, you may, no later than April 29, 2002, move the Court to serve as lead plaintiff of the class, if you so choose, pursuant to the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), 15 U.S.C. section 78u-4(a). A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. 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 seek appointment as a lead plaintiff. For more information about the case, its claims, and your rights, please contact:
Ira M. Press, Esq. Orie Braun KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue, 10th Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free (888) 529-4787 E-Mail: obraun@kmslaw.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca