NEW YORK, Feb. 14, 2003 (PRIMEZONE) -- Abbey Gardy, LLP commenced a Class Action lawsuit in the United States District Court for the District Court, Southern District of New York (03 cv 1053) on behalf of a class (the "Class") of all persons or entities who purchased securities of Cosi, Inc. ("Cosi" or the "Company") (Nasdaq:COSI) between November 21, 2002 and February 3, 2003, inclusive (the "Class Period").
The Complaint alleges that defendants violated Section 11 of the Securities Act of 1933 by issuing a false and misleading Registration Statement and Prospectus in connection with Cosi's initial public offering ("IPO") on November 21, 2002 of 5.5 million shares at $7 per share. The Prospectus misrepresented that the proceeds of the offering were sufficient to fund the Company's fast growth business plan for at least two years, allowing Cosi to open between 53 and 59 new company-owned specialty sandwich shops in 2003. On February 3, 2003, just ten weeks after the IPO, Cosi shocked the market by announcing the immediate resignation of CEO and co-founder Andy Stenzler, that Cosi would lay off personnel, and that it would open only 10 new stores in 2003. In addition, the Company stated that it would immediately reverse its company-owned stores business model to one involving turning the business over to franchisees. The Complaint alleges that, at the time of the IPO, Cosi's business plan had already failed, and that the proceeds raised in the offering were less than were needed to fund even the Company's short term needs. In reaction to this unexpected bad news, Cosi shares fell significantly, closing at $2.80 per share on February 4, 2003, down $1.67 or almost 40%.
The Complaint alleges that the defendants failed to exercise reasonable due diligence to ensure that the Prospectus disclosed all material facts The defendants named in the Complaint are Cosi, Inc., former CEO Andy Stenzler, and the members of Cosi's Board of Directors who signed the Registration Statement for Cosi's November 21, 2002 IPO. Also named as a defendant is the lead underwriter for the IPO, William Blair & Co., LLC.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired Cosi securities during the Class Period. If you purchased or otherwise acquired Cosi securities during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. If you purchased Cosi securities during the Class Period, you may, no later than April 7, 2003 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 plaintiffs." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.
Abbey Gardy, LLP has been retained as one of the law firms to represent the Class. The attorneys at Abbey Gardy, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact Evan Kaufman, Esq. of Abbey Gardy, LLP. at (800) 889-3701 or email EKaufman@abbeygardy.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca