PHILADELPHIA, Sept. 27, 2002 (PRIMEZONE) -- The law firm of Spector, Roseman & Kodroff, P.C. announces that a class action has been commenced in the United States District Court for the Eastern District of Texas on behalf of purchasers of Fleming Companies Inc. ("Fleming" or the "Company") (NYSE:FLM) common stock during the period between May 9, 2001 and September 4, 2002 (the "Class Period").
The complaint alleges that Fleming and certain of its officers and directors violated the Securities Exchange Act of 1934. Fleming is a wholesale food distributor, supplying brand-name and private-label food and general merchandise to thousands of retailers. It also owns more than 100 stores which operate under the Food4Less and Rainbow Foods banners. The complaint alleges that during the Class Period, Fleming issued false statements, including false financial results in which the Company included income from vendor discounts to which Fleming was not entitled.
As a result of defendants' false statements, the Company's stock traded at artificially inflated levels, as high as $37.30 per share, permitting Fleming to complete an 8 million share secondary stock offering, a $200 million Note offering and the acquisition of Core-Mark International in the spring of 2002. Also, due to Fleming's artificially inflated earnings, its CEO and CFO received bonuses for 2001 of $2.6 million and $1.15 million, respectively.
On September 5, 2002, Fleming announced its estimates would need to be reduced. On the same day, The Wall Street Journal discussed Fleming's practice of taking excessive deductions on the amounts it owed to vendors. The article mentioned an executive of the Company who resigned due to his objection to the practice, and also indicated that some vendors refused to ship to Fleming because of disputes with Fleming over the practice. Once this news was revealed, Fleming's stock collapsed to $6.87 before closing at $6.92, some 80% below the Class Period high of $37.30.
If you purchased Fleming securities during the Class Period, you may, no later than October 28, 2002 move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in Fleming securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or via E-mail at classaction@srk-law.com. For more detailed information about the firm please visit its website at http://www.srk-law.com.
Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania and San Diego, California, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered on behalf of thousands of defrauded shareholders and companies.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.