ATLANTA, April 2, 2003 (PRIMEZONE) -- Chitwood & Harley announces that it has filed a class action lawsuit in the United States District Court for the Eastern District of Michigan on behalf of investors who purchased or otherwise acquired securities of Collins & Aikman Corporation, ("CKC" or the "Company), (NYSE:CKC), between August 7, 2001 and August 2, 2002. The suit is brought against Collins & Aikman Corporation, Heartland Industrial Partners, L.P., and certain of Collins & Aikman's officers and directors. A copy of the complaint is available on our website, www.classlaw.com. The deadline to file lead plaintiff papers, for those class members wishing to serve in this capacity, is May 23, 2003.
The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between August 7, 2001 and August 2, 2002 (the "Class Period"). The complaint alleges that Heartland was at all relevant times a private equity firm that presented itself as being an expert in leveraged buyouts of industrial manufacturers and that, in February 2001, Heartland acquired a controlling interest in CKC. CKC was at all relevant times a manufacturer of automotive interior components. The complaint further alleges that Heartland and CKC acquired Textron Automotive Company's TAC-Trim division and that, throughout the Class Period, Heartland and CKC repeatedly stated that the TAC-Trim acquisition would be accretive to earnings and that, in addition to doubling CKC's annual revenue, the TAC-Trim acquisition would increase operating income by reducing costs through synergies and economies of scale.
The truth was revealed on August 5, 2002, when the Company reported a net loss of $20.3 million, or a loss of $0.29 per diluted share, compared with net income of $9.2 million, or $0.11 per diluted share a year earlier, and announced that it expected 2002 earnings to be $0.20 to $0.26 per share, well below the consensus estimate of $0.74 per share. The market reacted swiftly to this news, pushing the price of CKC stock down 49% to close at $2.81 on relatively high trading volume.
Chitwood & Harley LLP is a class action firm that concentrates its practice in representing victims of securities fraud and corporate mismanagement, as well as other complex litigation. Chitwood & Harley has been appointed lead counsel in major actions throughout the United States and has been instrumental in recovering billions of dollars on behalf of its clients. Clients and courts alike have praised the results achieved by Chitwood & Harley. Recently, the federal judge in In re BankAmerica Securities Litigation, which resulted in the highest recovery last year in a securities class action, commented favorably on counsel's performance stating: "Class members were well served by experienced attorneys who, through considerable time and effort, obtained a significant recovery for their clients," and, "(a)s the Court has remarked throughout this litigation, class counsel ... have performed at exceptionally high levels, and all parties have been exceedingly well represented."
The deadline to file lead plaintiff papers is May 23, 2003. There are certain legal requirements to serve as lead plaintiff, which we would be happy to discuss with you. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may contact Lauren Antonino or Jennifer Morris at 1-888-873-3999 (toll-free) or by e-mail at jlm@classlaw.com. You may also contact us through our website, www.classlaw.com, by clicking on Collins & Aikman Corporation.
For more information about Chitwood & Harley, please visit our website at www.classlaw.com or contact Jennifer Morris at 1-888-873-3999 (toll-free), by e-mail at jlm@classlaw.com or at 1230 Peachtree Street, Suite 2300, Atlanta, Georgia 30309.
More information on this and other class actions can be found on the Class Action Newsline at http://www.primezone.com/ca