BALA CYNWYD, Pa., Oct. 10, 2002 (PRIMEZONE) -- A shareholder sued Fleming Companies, Inc. (NYSE:FLM) claiming that the company misled investors about its business and financial condition, as alleged in a complaint filed by the law firm of Schiffrin & Barroway, LLP.
The complaint was filed in the U.S. District Court for the Eastern District of Texas, Texarkana Division (502-CV-190) and seeks damages for violations of federal securities laws on behalf of all investors who bought Fleming Companies, Inc. securities between February 27, 2002 and July 30, 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 Fleming Companies, 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 Texas-based Fleming Companies, Inc., beginning in early 2002, the issued numerous positive statements regarding Fleming's "price-impact" retail supermarket division. These statements were made despite the fact that the defendants knew, or recklessly disregarded, that the performance of Fleming's "price-impact" retail supermarket division was, in the words of the defendants, "disappointing." These statements falsely portrayed Fleming's business prospects and artificially inflated and maintained the price of Fleming common stock. The defendants capitalized on their false and misleading statements by: 1) lowering the interest rate and extending the maturity on $250 million of Fleming's debt; 2) raising over $155 million through the June 13, 2002 sale of 8 million shares of Fleming common stock at $19.40 per share; 3) raising an additional $200 million through the June 13, 2002 sale of Fleming Notes due 2010; and 4) using the proceeds of the June 13, 2002 securities sales to complete the purchase of Core-Mark International, Inc. and Head Distributing for $330 million in cash -- acquisitions described by the defendants as "key" to Fleming's implementation of its strategic transformation into an efficient, national, multi-tier supply chain for consumer packaged goods.
Then, approximately six weeks after defendants sold $355 million worth of Fleming securities, Fleming announced after the close of trading on July 30, 2002 in an abrupt departure to the repeated and positive statements made by the defendants during the Class Period, that its "price-impact" retail supermarket division was not only performing poorly, but performing so poorly that Fleming was considering abandoning this line of business entirely. The price of Fleming common stock dramatically declined on this announcement, falling from $15.21 on July 30, 2002 to $13.75 on July 31, 2002, on huge trading volume of 3.9 million shares, and continued to decline over the next two heavy trading days to a 52-week low of $10.76 on August 2, 2002. Since then, the price of Fleming common stock has never recovered, and currently trades well below the $19.40 price at which Fleming sold 8 million shares to unsuspecting investors on June 13, 2002.
If you purchased Fleming Companies, Inc. securities between February 27, 2002 and July 30, 2002, you may be a member of the class and have until October 28, 2002 to move the court to become a lead plaintiff. To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway 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