NEW YORK, March 8, 2002 (PRIMEZONE) -- The law firm of Abbey Gardy, LLP has filed a class action against Medi-Hut Co. ("Medi-Hut") (Nasdaq:MHUT) and certain of its officers and directors in the United States District Court for the District of New Jersey, on behalf of all persons or entities who purchased Medi-Hut common stock during the period from April 4, 2000 through February 4, 2002.
The complaint seeks damages for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The defendants are Medi-Hut; Joseph A. Sanpietro, Medi-Hut's President and Chief Executive Officer; Laurence M. Simon, Chief Financial Officer of the Company; Robert Russo, Treasurer of Medi-Hut; Vincent Sanpietro, Secretary of Medi-Hut; and James G. Aaron and James S. Vacarro, both members of the Company's Board of Directors.
Plaintiff has alleged that defendants knowingly and recklessly disseminated materially false and misleading statements and omissions that misrepresented the Company's business, operations and financial performance. The complaint alleges among other things 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 Lawrence 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. The Company, however, failed to disclose the true nature of its sales to Larval.
The complaint further alleges that as a result of the misrepresentations and omissions by 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, Lawrence Marasco and Larval Corp. was revealed to the market. The investing public, recognizing that a majority of the Company'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 ("Grant Thornton") resigned its position as Medi-Hut's independent auditor.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired securities during the Class Period. If you purchased or otherwise acquired securities during the Class Period, and either lost money on the transactions or still hold the securities, you may wish to join in the action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than April 29, 2002.
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 plaintiffs." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Abbey Gardy, LLP, or other counsel of your choice, to serve as your counsel in this action.
Abbey Gardy, LLP has been retained as one of the law firms to represent the Class. The attorneys at Abbey Gardy, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact Nancy Kaboolian, Esq. or Jennifer Haas of Abbey Gardy, LLP at (800) 889-3701 or email JHaas@abbeygardy.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca