MINNEAPOLIS, June 21, 2005 (PRIMEZONE) -- The law firm of Lockridge Grindal Nauen P.L.L.P. announces that it filed class action lawsuit on Monday, June 13 on behalf of purchasers of the securities of Navarre Corp. ("Navarre" or the "Company") (Nasdaq:NAVR) between July 23, 2003 and May 31, 2005, inclusive (the "Class Period") seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act").
If you bought the securities of Navarre between July 23, 2003 and May 31, 2005 and sustained damages, you may, no later than August 12, 2005, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Lockridge Grindal Nauen P.L.L.P., or other counsel of your choice, to serve as your counsel in this action.
The action is pending in the United States District Court for the District of Minnesota against defendants Navarre, Eric H. Paulson (CEO, President, Chairman) and James Gilbertson (CFO). A copy of the complaint filed in this action is available from the Court.
The complaint alleges that throughout the Class Period defendants reported quarter after quarter of record results that were purportedly achieved by successful execution of the Company's business strategy. As particularized in the complaint, defendants' class period representations concerning the Company's financial results and its business were materially false and misleading for the following reasons: (a) Defendants had materially inflated Navarre's reported income by failing to properly recognize expenses relating to executive deferred compensation; (b) Defendants' seeming success was attributable, in material part, to improper accounting; (c) The Company's financial results, reported in press releases and SEC filings were not, contrary to defendants' express representations, prepared in accordance with generally accepted accounting principles; (d) The certifications signed by defendants Paulson and Gilbertson in Navarre's SEC filings, attesting to the accuracy of the financial results included therein, were false because the financial results were artificially inflated through improper accounting; (e) during the third fiscal quarter of 2005, Navarre improperly recognized millions in deferred tax benefits as income; and (f) Navarre was experiencing a significant slowdown in demand for its anti-virus software products that was materially and negatively impacting its overall business.
On May 31, 2005, Navarre issued a press release announcing that it would postpone release of its fourth quarter and fiscal year 2005 results pending an accounting review focused on the recognition of deferred compensation expense for payments made to defendant Paulson and the classification of fiscal 2005 tax items. In response to this announcement, the price of Navarre common stock dropped from $9.00 per share on May 31, 2005 to $8.02 per share on June 1, 2005, a one-day drop of 10.8% on unusually heavy trading volume.
The complaint further alleges that defendants were motivated to commit the wrongdoing alleged therein so that Navarre insiders, including defendants Paulson and Gilbertson, could sell their personally held Navarre shares at artificially inflated prices. During the Class Period, insiders sold a total of 1,269,000 shares, for total proceeds of $16,183,254.58.
Plaintiff seeks to recover damages on behalf of class members and is 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 millions 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.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.