NEW YORK, Feb. 6, 2002 (PRIMEZONE) -- The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on January 4, 2002, on behalf of purchasers of the securities of Rent-A-Center Inc. ("Rent-A-Center" or the "Company") (Nasdaq:RCII) between April 25, 2001 and October 8, 2001 inclusive (the "Class Period'). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' website at: http://www.milberg.com/rentacenter/
The action is pending in the United States District Court for the Eastern District of Texas, Texarkana Division, located at 500 State Line Ave., Texarkana Texas 75501, against defendants Rent-A-Center, J. Ernest Talley (Chairman and CEO until October 8, 2001), Mitchell E. Fadel (President and Director), Robert D. Davis (CFO and Treasurer) and Mark E. Speese (Director until October 8, 2001, thereafter Chairman and CEO).
The complaint charges 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 April 25, 2001 and October 8, 2001. For example, on April 25, 2001, Rent-A-Center issued a press release announcing record results for the first quarter of 2001 and highlighting the Company's resilience in a weakening economy. The representations in the press release were, according to the allegations of the complaint, materially false and misleading because the Company did not disclose that its expenses were rising dramatically as Rent-A-Center attempted to combat weakening demand with deep discounts and promotions. While in possession of this adverse non-public information, Rent-A-Center completed a secondary offering of 3,200,000 shares of its common stock at $42.50 per share, on May 25, 2001. Defendant Talley sold 1,700,000 Rent-A-Center shares in the secondary offering, grossing over $72 million, and defendant Speese sold 500,000 shares, grossing over $21 million. Then, on May 31, 2001, defendant Talley sold an additional 1,955,000 shares of Rent-A-Center common stock at $40.38 per share, grossing over $78 million. Subsequently, on October 8, 2001, only five months after the secondary offering, Rent-A-Center issued a press release announcing that earnings for the third and fourth quarter of 2001 would be significantly less than the Company's previous guidance to the market, due to rising expenses. In response to this announcement, Rent-A-Center's stock price dropped by 19% in one day on heavy trading volume.
If you bought the securities of Rent-A-Center between April 25, 2001 and October 8, 2001, you may, no later than March 5, 2002, 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 Milberg Weiss Bershad Hynes & Lerach LLP, or other counsel of your choice, to serve as your counsel in this action.
Milberg Weiss Bershad Hynes & Lerach LLP (http://www.milberg.com) is a 170-lawyer firm with offices in New York City, San Diego, San Francisco, Los Angeles, Boca Raton, Philadelphia and Seattle, and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others, and has been responsible for more than $20 billion in aggregate recoveries. Please contact the Milberg Weiss website for more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:
Steven G. Schulman or Samuel H. Rudman One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 Phone number: (800) 320-5081 Email: rentacentercase@milbergNY.com Website: http://www.milberg.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.