MINNEAPOLIS, May 27, 2003 (PRIMEZONE) -- Lockridge Grindal Nauen P.L.L.P. announced today that a class action lawsuit has been filed in the United States District Court for the Eastern District of New York, located at 100 Federal Plaza, Central Islip, NY 11722-4438, on behalf of purchasers of Allou Healthcare, Inc. ("Allou Healthcare" or the "Company") (AMEX:ALU) publicly traded securities during the period between June 22, 1998 and April 9, 2003, inclusive (the "Class Period").
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 material misrepresentations to the market between June 28, 1998 and April 9, 2003, thereby artificially inflating the price of Allou securities. The Complaint alleges that defendants issued a series of materially false and misleading statements concerning the Company's financial results. In particular, the Complaint alleges: (a) that Allou was materially overstating its accounts receivables by at least $78 million, thereby overstating its revenues and earnings; (b) that Allou was materially overstating its inventory, thereby overstating its net worth; and (c) as a result of the foregoing, Allou's financial statements were not prepared in accordance with GAAP and were therefore materially false and misleading.
On April 9, 2003, Allou announced that "its lenders have filed an involuntary petition for bankruptcy in the Eastern District of New York under the provisions of chapter 11, title 11, of the United States Code." Following this news, on April 9, 2003, AMEX suspended trading in Allou's common stock. Thereafter, press reports revealed that an outside restructuring expert that had been retained to run Allou discovered, among other things, that "only $30 million of $108 million in accounts receivable reported by Allou to its banks seemed to be valid." Furthermore, on April 24, 2003, Allou announced that it "believes that the levels of assets collateralizing loans were substantially overstated in recent reports submitted by the Company to its senior lenders. The preliminary results of the Company's investigation indicate that inventory was overstated by approximately $35,000,000 and that accounts receivable may be overstated by $75,000,000 to $80,000,000, for a total overstatement of $110,000,000 to $115,000,000. The Company has retained a forensic accounting firm to assist with the continuing investigation of this matter."
If you bought Allou Healthcare publicly traded securities between June 22, 1998 and April 9, 2003, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than July 1, 2003. Any member of the purported class may move the Court to serve as lead plaintiff through Lockridge Grindal or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Plaintiffs are represented by the law firm of Lockridge Grindal Nauen P.L.L.P. The firm has considerable experience in prosecuting securities class actions, has extensive experience representing shareholders in class actions, and has successfully recovered billions of dollars for defrauded investors and shareholders. The reputation and expertise of the firm in shareholder and other class action litigation have been repeatedly recognized by courts, which have appointed the firm to major positions in complex multi-district and consolidated litigations. Lockridge Grindal Nauen P.L.L.P. has offices in Minneapolis and Washington, D.C.
If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or write:
Karen M. Hanson, Esq. Lockridge Grindal Nauen P.L.L.P. 100 Washington Avenue South Suite 2200 Minneapolis, MN 55401 (612) 339-6900 kmhanson@locklaw.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca