NEW YORK, April 11, 2003 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) announces that a class action lawsuit has been filed in the United States District Court for the Northern District of Georgia, on behalf of purchasers of the securities of AFC Enterprises, Inc. (Nasdaq:AFCE) ("AFC" or the "Company") between March 2, 2001 and March 24, 2003, inclusive (the "Class Period"), against AFC and certain of its officials.
It has been alleged that AFC violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing false and misleading statements during the Class Period which had the effect of artificially inflating the market price of AFC's securities. The Company has essentially admitted that it had reported inflated financial results during the Class Period. On March 24, 2003, AFC announced that it will restate earnings for 2001 and the first three quarters of 2002. As part of the restatement, AFC will record about $4.5 to $5.5 million pre-tax at year end 2001 and about $11 to $12 million pre-tax at year-end 2002 to write down the value of impaired assets.
The Company has further acknowledged that the restatement is required because it had previously improperly recorded certain gains on asset sales to franchises, understated advertising expenses and improperly accounted for inventory at its Seattle Coffee Company unit.
The Company began to reveal the true state of its affairs on March 24, 2003, after the market's close. In reaction, its stock plunged to as low as $11.30 per share on March 25, 2003, after closing at $17.10 per share the previous day. It has been alleged that the individual defendants and other Company officials engaged in insider selling and reaped millions in profits before disclosure of the fraud.
If you purchased the securities of AFC during the Class Period, you have until May 27, 2003 to ask the Court to appoint you as lead plaintiff for the Class. To serve as lead plaintiff, you must meet certain legal requirements. If you wish to discuss the pending litigation or have any questions, please contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888-476-6529 (or (888) 4-POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz firm, which has offices in New York, Chicago and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca