PHILADELPHIA, Aug. 26, 2002 (PRIMEZONE) -- On July 15, 2002, the law firm of Berger & Montague, P.C. (http://www.bergermontague.com) filed a class action suit against CryoLife, Inc. ("CryoLife") (NYSE:CRY) and certain of its principal officers and directors in the United States District Court for the Northern District of Georgia on behalf of all persons or entities who purchased CryoLife securities between April 2, 2001 and July 5, 2002 (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 the Securities and Exchange Commission by issuing materially false and misleading statements throughout the Class Period regarding quality control problems in CryoLife's processing of human tissues and heart valves that had the effect of artificially inflating the market price of CryoLife's securities.
CryoLife's Class Period assurances to the investing public that patient safety was of paramount concern to it and that CryoLife complied with applicable governmental processing and quality regulations were knowingly false when made. CryoLife has demonstrated a pattern of nondisclosure or severe reckless disregard with respect to its disclosures to shareholders. Despite having been put on notice in 2001 that the Centers for Disease Control ("CDC") was concerned about infections from tissue implants obtained from CryoLife and despite having been notified at least by March 22, 2002 that at least one, if not two, patients in whom CryoLife processed heart valves had been implanted had developed fungal endocarditis, CryoLife failed to correct its false assurances of quality control and failed to disclose that the Company was being investigated by the CDC and the U.S. Food & Drug Administration ("FDA") for violation of quality control regulations. In fact, on March 29, 2002, no mention of these problems was made at the annual shareholders' meeting. After rumors began to surface in June 2002, CryoLife revealed to the investing public the fact that CryoLife had received a warning letter from the FDA citing material violations of FDA safety regulations. In an attempt to downplay the warning letter's significance and to assure investors that CryoLife would react swiftly to any discovery of areas in need of improvement, CryoLife falsely assured its investors that it had never before received such a warning. On June 24, 2002, CryoLife also denied that there was any evidence of fungal infection on either heart valve.
The CDC disagreed, however, and called CryoLife on July 3, 2002 to confirm that CryoLife had received a letter in March 2002 showing that signs of infection had been confirmed. Then on July 5, 2002, a day on which the stock markets closed at 1:00 p.m., the Company issued a press release admitting that it provided an infected heart valve to a California patient, which led to a frequently fatal fungal infection and removal of the valve.
CryoLife also misrepresented its 2001 income and earnings during the Class Period, in violation of generally accepted accounting principles ("GAAP"), overstating both income and earnings per share by approximately 20%, requiring a restatement of its reported financial results for 2001.
The market's reaction to CryoLife's belated disclosures was swift and severe. Following these disclosures, the market price of CryoLife's common stock dropped from a high of almost $45 per share during the Class Period and from $23.66 per share just before the disclosure to as low as $9.90 per share on July 10, when the disclosure had been digested.
If you purchased CryoLife securities during the period from April 2, 2001 through July 5, 2002, inclusive, you may, no later than September 6, 2002, move to be appointed as a Lead Plaintiff. A Lead Plaintiff is a representative party that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest,'' and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in CryoLife securities during the Class Period, please contact Berger & Montague, P.C. at investorprotect@bm.net for a more thorough explanation of the Lead Plaintiff selection process.
The law firm of Berger & Montague, P.C. has over 50 attorneys, all of whom represent plaintiffs in complex litigation. The firm has special expertise in cases involving misrepresentations by drug and biotechnology companies. For example, the firm has served as lead or co-lead counsel in numerous class actions against such companies, including U.S. Bioscience, Inc., Synergen, Inc., Centocor, Inc., Cephalon, Inc., Cell Pathways, Inc. and Genentech, Inc.
The Berger firm has extensive experience representing plaintiffs in class action securities litigation and has played lead roles in major cases over the past 25 years, which have resulted in recoveries of several billion dollars to investors. The firm has represented investors as lead counsel in actions against companies including Rite Aid, Sotheby's, Waste Management, Inc., Sunbeam, Boston Chicken and IKON Office Solutions, Inc. The standing of Berger & Montague, P.C. in successfully conducting major securities and antitrust litigation has been recognized by numerous courts. For example:
"Class counsel did a remarkable job in representing the class
interests." In Re: IKON Offices Solutions Securities Litigation.
Civil Action No. 98-4286(E.D.Pa.) (partial settlement for
$111 million approved May, 2000).
"...(Y)ou have acted the way lawyers at their best ought to act.
And I have had a lot of cases...in 15 years now as a judge and I
cannot recall a significant case where I felt people were better
represented than they are here ... I would say this has been the
best representation that I have seen." In Re: Waste Management,
Inc. Securities Litigation, Civil Action No. 97-C 7709 (N.D.
Ill. Settled in 1999 for $220 million).
If you purchased CryoLife securities during the Class Period, please visit our website at www.bergermontague.com to view the complaint and join the class action or if you have any questions concerning this notice or your rights with respect to this matter, please contact:
Sherrie R. Savett, Esquire Carole A. Broderick, Esquire Barbara A. Podell, Esquire Kimberly A. Walker, Investor Relations Manager Berger & Montague, P.C. 1622 Locust Street Philadelphia, PA 19103 Phone: 888-891-2289 or 215-875-3000 Fax: 215-875-5715 Website: http://www.bergermontague.com e-mail: InvestorProtect@bm.net
More information on this and other class actions can be found on the Class Action Newsline at http://www.primezone.com/ca