BALA CYNWYD, Pa., Dec. 3, 2002 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of Footstar, Inc. ("Footstar" or the "Company") (NYSE:FTS) between February 8, 2002 and November 12, 2002, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges Footstar, Inc. and certain of its officers and directors with issuing false and misleading statements concerning its business and financial condition. Specifically, the complaint alleges that throughout the Class Period, as alleged in the complaint, defendants issued numerous statements and filed quarterly reports and an annual report with the SEC which described the Company's increasing revenues and financial performance. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (i) that, since at least 2001, the Company had cumulatively understated its accounts payable by approximately $35 million; (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (iii) that as a result, the value of the Company's balance sheet and financial results were materially overstated at all relevant times.
On November 13, 2002, Footstar shocked the market by announcing that it had "discovered discrepancies in the reporting of its account payable balances," following management's review of the account reconciliation processes of its accounts payable balances. Specifically, defendants had cumulatively understated the Company's accounts payable balances in its athletic segment by approximately $35 million. As a result, the Company announced that it will likely be restating its financial statements for the first nine months of 2002 and prior periods, with a significant portion of the discrepancies affecting fiscal year 2001 and earlier. Following this announcement, shares of Footstar fell $1.25, or almost 20%, to close at $5.05, after hitting an intraday low of $3.30, on volume of 2,137,700 shares traded, or almost six times Footstar's average daily trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, LLP, which prosecutes class actions on behalf of investors and shareholders. For more information on Schiffrin & Barroway, or to sign-up to participate in this action online, please visit http://www.sbclasslaw.com/cgi/signup.cgi.
If you are a member of the class described above, you may, not later than January 13, 2003, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca