ATLANTA, April 10, 2003 (PRIMEZONE) -- Chitwood & Harley LLP announces that a class action lawsuit is pending in the United States District Court for the Eastern District of Tennessee, against UnumProvident, Corp., and certain of its officers and directors. Suit was brought on behalf of purchasers of the common stock of UnumProvident, Corp., (NYSE:UNM), between May 7, 2001 and February 4, 2003, inclusive ("Class Period"). (Subsequently, one plaintiff has alleged a class period that ends instead on March 7, 2003.)
The complaint charges UnumProvident and certain of its officers and directors with violations of the Securities Exchange Act of 1934. UnumProvident provides group disability and special risk insurance, as well as group life insurance, long-term care insurance, and payroll-deducted voluntary benefits offered to employees at their worksites. UnumProvident operates around the World. The complaint alleges that during the Class Period, defendants caused UnumProvident's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. The complaint charges the Company with failing to properly record the impairment to its investments and operating "long-term denial factories," causing the Company's financial results to be inflated. As a result, the Company's shares traded at inflated prices enabling UnumProvident to raise proceeds of $250 million on June 13, 2002 in its bond offering.
UnumProvident and its top officers, the complaint says, inflated the prices of the Company's securities in order to pursue an accelerated securities sale program. Defendants knew that by concealing UnumProvident's true financial results they could foster the perception in the business community that UnumProvident was a "growth company," i.e., it was the only way UnumProvident could post the revenue and earnings per share growth claimed by defendants. The price of UnumProvident securities plummeted when, on February 5, 2003, UnumProvident was forced to announce that it had recorded investment losses of $93 million and also reported that it was responding to Securities and Exchange Commission requests for information relating to its investment disclosures.
On Monday, March 24, 2003, UnumProvident restated its profits $29.1 million lower for the past three years, as the U.S. disability insurer changed its accounting for investment losses, after talks with the U.S. Securities and Exchange Commission. In its restatement, the company reported 2002 net profit $34.2 million higher, but 2001 and 2000 earnings $38 million and $25.3 million lower, respectively. That equals a net $29.1 million reduction in profit over the three years. The restatement was due to the treatment of unrealized losses on below investment grade securities, which means junk-rated investments.
Chitwood & Harley LLP is currently investigating the details of the restatement, and claims against UnumProvident, and its officers and directors. 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 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 UnumProvident. If you wish to serve as lead plaintiff in this action, you must file a motion to do so no later than April 14, 2003. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of his or her choice, or may choose to do nothing and remain an absent class member.
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."
For more information about Chitwood & Harley LLP, 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.
3900 More information on this and other class actions can be found on the Class Action Newsline at http://www.primezone.com/ca