CHICAGO, April 4, 2003 (PRIMEZONE) -- Much Shelist Freed Denenberg Ament & Rubenstein, P.C. announces that a class action lawsuit is pending in the United States District Court for the Northern District of Georgia on behalf of purchasers of the securities of AFC Enterprises, Inc. (Nasdaq:AFCE) ("AFC" or the "Company") between March 2, 2001 and March 24, 2003, inclusive ("Class Period").
It has been alleged that AFC violated the federal securities laws by issuing a series of materially false and misleading statements to the market, which had the effect of artificially inflating the market price of AFC's securities. In addition to AFC, the complaint names Frank J. Belatti, the Company's Chief Executive Officer, and Gerald J. Wilkins, AFC's Chief Financial Officer.
According to the complaint, the Company's Class Period statements were materially false and misleading because the press releases and SEC filings it issued during the Class Period failed to reveal that AFC inflated its operating results by: (1) improperly accounting for the sale of corporate-owned stores to franchisees; (2) improperly accounting for the value of certain long-lived assets; (3) understating advertising costs; and (4) improperly accounting for inventory at the Company's Seattle Coffee Company division. As a result of the Company's fraudulent accounting, AFC's financial statements published during the Class Period were materially false and misleading and not prepared in accordance with Generally Accepted Accounting Principles.
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. On March 25, 2003, AFC stocked plunged to as low as $11.30 per share after closing at $17.10 per share the previous day. According to the complaint, AFC insiders privy to the Company's fraudulent accounting practices did not share investors' losses. Allegedly, in a December 2001 public offering, AFC insiders sold 7,000,000 shares of their holdings at $23 per share. According to the complaint, the defendants and other Company insiders cashed out at prices as high as $34 per share, reaping profits of over $30 million during the Class Period.
Much Shelist is currently investigating these claims. If you wish to discuss your rights and interests, or if you have information relevant to the lawsuit, you may contact Carol V. Gilden or Michael E. Moskovitz at Much Shelist Freed Denenberg Ament & Rubenstein, P.C., by calling a toll-free number 1-800-470-6824, or by sending an e-mail to investorhelp@muchshelist.com. Your e-mail should refer to AFC. If you purchased AFC securities during the Class Period and if you meet certain other legal requirements, you may file a motion in the court where the lawsuit has been filed to serve as a lead plaintiff. You must file your motion no later than May 27, 2003.
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 plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 78u-4).
Much Shelist's history is one of experience, leadership and results. For more than 25 years, Much Shelist has represented plaintiffs in class action litigation in federal and state courts across the United States. The firm has successfully prosecuted cases involving securities fraud, antitrust violations, consumer fraud, unlawful business practices and insurance company fraud. Under Much Shelist's leadership, class members have obtained judgments and settlements in excess of $4 billion.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca