NEW YORK, Aug. 22, 2002 (PRIMEZONE) -- The law firm of Wechsler Harwood Halebian & Feffer LLP ("Wechsler Harwood") announces that a class action has been commenced in the United States District Court for the District of Minnesota on behalf all persons who purchased or acquired Pemstar, Inc. (Nasdaq:PMTR) ("Pemstar" or the "Company") securities pursuant to the June 8, 2001 Secondary Offering ("Secondary Offering") against defendants Pemstar and certain of its officers and directors.
The complaint charges Pemstar and certain of its officers and directors with violations of the Securities Act of 1933. The complaint alleges that the defendants caused the issuance of false and misleading statements. In particular, the Registration Statement and Prospectus for the Secondary Offering were materially false and misleading when issued as they misrepresented and/or omitted one or more of the following adverse facts which then existed and disclosure of which was necessary to make the statements made not false and/or misleading, including, but not limited to: (a) In order to attract and maintain the appearance of a diverse customer base, Pemstar: (i) executed orders from customers without industry track records or acceptable financial conditions, in fact, several were on the brink of bankruptcy; and (ii) had an extremely liberal policy of accepting and holding inventory for and from existing and prospective customers (often without ever obtaining a written contract), the result of which was that Pemstar significantly increased its costs of doing business and was forced to write down obsolete inventory. In fact, a substantial amount of the Company's inventory was already obsolete. (b) Due to a lack of internal controls, reflected, but not acknowledged in Pemstar's contracts with Datasweep: (i) Pemstar's "cash conversion cycle," or the amount of time between the purchase of inventory and the collection of payment, was dramatically lower than its competitors', which resulted in Pemstar having to write down material amounts of accounts receivables; and (ii) Pemstar's "days sales outstanding," the number of days Pemstar had to wait payment for sales, was dramatically lower than its competitors', which resulted in Pemstar having to write down material amounts of accounts receivables.
If you are a member of the Class described above, and if you meet certain other legal requirements, you may, no later than September 23, 2002, move the Court to serve as a 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." The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 77z-1).
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whhf.com) has 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:
Wechsler Harwood Halebian & Feffer LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400
More information on this and other class actions can be found on the Class Action newsline at www.primezone.com/ca