BALA CYNWYD, Pa., July 1, 2002 -- (PRIMEZONE) A pending class action charges Great Atlantic & Pacific Tea Company, Inc. ("Great Atlantic" or the "Company") (NYSE:GAP) with misleading investors about its business and financial condition according to the law firm of Schiffrin & Barroway, LLP.
The complaint was filed in the U.S. District Court for the District of New Jersey (02-CV-2674). Plaintiff seeks damages for violations of the federal securities laws on behalf of all investors who purchased Great Atlantic & Pacific Tea Company, Inc. securities between November 15, 2001 and May 28, 2002 (the "Class Period").
Schiffrin & Barroway, LLP has prosecuted shareholder class actions for over fourteen years and has recovered more than $1 billion for investors. If you are a shareholder of Great Atlantic & Pacific Tea Company, Inc. and want to learn more about this lawsuit and about becoming a lead plaintiff, you may visit our website at http://www.sbclasslaw.com/cgi/signup.cgi.
The complaint alleges that the New Jersey-based Great Atlantic & Pacific Tea Company, Inc. issued statements regarding Great Atlantic's quarterly and annual financial performance and filed reports confirming such performance with the United States Securities and Exchange Commission ("SEC"). The complaint alleges that these statements were materially false and misleading because, among other things, (i) the Company was employing improper accounting practices regarding the recognition of vendor allowances and the accounting of inventory in certain of its regions for fiscal year 2001 in violation of Generally Accepted Accounting Principles. As a result, the Company's operating results were materially misrepresented and overstated; and (ii) based on the foregoing, defendants' statements concerning the prospects of Great Atlantic were lacking in a reasonable basis at all times.
On May 28, 2002, the last day of the Class Period, the Company announced that it would delay the filing of its annual report with the SEC while it conducted an accounting review which will most likely result in a charge to earnings. The accounting review will focus on the appropriate timing for the recognition of vendor allowances and the accounting of inventory in certain of the Company's regions for fiscal year 2001. Great Atlantic further noted that a substantial portion of any charge the Company will take will reverse credits which were recognized prematurely as reductions of cost of merchandise sold, and that portion will therefore be recognized in periods subsequent to fiscal 2001 as reductions of cost of merchandise sold. Following this disclosure, Great Atlantic stock fell $4.03 per share, or approximately 16%, to close on May 28, 2002 at $21.070 per share.
If you purchased Great Atlantic & Pacific Tea Company, Inc. securities between November 15, 2001 and May 28, 2002, you may be a member of the class and have until August 2, 2002 to move the court to become a lead plaintiff. In order to serve as lead plaintiff, however, you must meet certain legal requirements. To be a member of the class, however, you do not need to take any action at this time. Should you decide to seek appointment as a lead plaintiff, you may retain Schiffrin & Barroway, or retain counsel of your choice.
To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) directly at 888-299-7706 (toll free) or 610-822-2221, fax number 610-822-0002, e-mail at info@sbclasslaw.com or visit our website at www.sbclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca