BALA CYNWYD, Pa., March 25, 2003 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Northern District of Georgia on behalf of all purchasers of the common stock of AFC Enterprises, Inc. ("AFC" or the "Company") (Nasdaq:AFCE) from March 2, 2001 through March 24, 2003, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
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 issuing a series of material misrepresentations to the market between March 2, 2001 and March 24, 2003, thereby artificially inflating the price of AFC securities.
The Complaint alleges that these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others: (a) that the Company was improperly accounting for the value of certain long-lived assets, thereby artificially inflating its operating results; (b) that the Company was improperly accounting for the sale of corporate-owned stores to franchisees, thereby artificially inflating its operating results; (c) that the Company was improperly accounting for cooperative advertising costs, thereby understating its advertising expenses and artificially inflating its operating results; (d) that the Company's Seattle Coffee Company was improperly accounting for inventory, sales allowances and slotting fees; and (e) as a result of the foregoing, the Company's financial statements published during the Class Period were not prepared in accordance with Generally Accepted Accounting Principles and, therefore, it was not true that the Company's financial statements were a "fair presentation" of the Company's financial position.
Indeed, by announcing its intention to restate its financial statements, AFC has admitted that its prior financial statements were materially false and misleading when issued.
On March 24, 2003, after the market closed, AFC shocked the market by announcing that it would be restating its financial statements for fiscal year 2001 and the first three quarters of 2002. The Company also reported that it was examining whether or not its financial statements for fiscal year 2000 should be restated. In response to this negative announcement the price of AFC common stock dropped precipitously, falling to as low as $12.30 per share, on extremely heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com/cgi/signup.cgi.
If you are a member of the class described above, you may, not later than May 27, 2003, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.