BALA CYNWYD, Pa., March 28, 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 Eastern District of Michigan on behalf of all purchasers of the common stock of Collins & Aikman Corp. (NYSE:CKC) ("Collins & Aikman" or the "Company"), from August 7, 2001 through August 2, 2002, 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 charges that during the Class Period, the defendants issued and/or failed to correct false and misleading financial statements and press releases concerning the Company's publicly reported revenues and earnings directed to the investing public.
On July 5, 2001 the Company announced the acquisition of the Becker Group LLC ("Becker"). This was the first step in a comprehensive yet poorly managed merger and acquisition plan to transform the company into a 'new' Collins & Aikman and a 'Mega Tier 2' supplier for the auto industry. On August 7, 2001, Collins & Aikman announced that it had signed a definitive agreement to acquire Textron Automotive Company's Trim Division ("TAC-Trim"), one of the world's largest suppliers of fully integrated cockpits, and a major automotive plastic parts manufacturer.
In addition by August 20, 2001, the Company had in place a definitive agreement for the acquisition of the automotive fabric operations of Joan Fabrics ("Joan") for all of the operating assets in Joan's affiliated yarn dying operation. Throughout the Class Period the defendants continually claimed that the merger activity would increase savings on the purchase of consolidated raw materials, consolidate management, research and design, engineering functions, and increase efficiency of manufacturing facilities. The Company financed the acquisitions through an ill fated strategy based on cash, the issuance of millions of shares of Collins & Aikman stock, debt restructuring and other creative financing methods.
However as the Class Period progressed, the negative and cumulative effect of the merger agreements began to adversely impact the Company's declining revenue. On August 5, 2002, the Company issued a press release where it reported that due to the accounting impact of the Company's previously disclosed repurchase of $133 million of preferred stock (tied into the 2001 merger activity), there was a non-cash charge to shareholder's equity of $36.3 million ($.52 per share). As a result of this charge the Company reported a net loss available to common shareholders of $20.3 million, or $.29 per diluted share.
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 23, 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.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca