BALA CYNWYD, Pa., May 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 Northern District of Illinois, Eastern Division on behalf of all purchasers of divine, inc. ("divine" or the "Company") (Other OTC:DVINQ) (formerly listed on NASDAQ) securities from November 12, 2001 through February 18, 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 charges defendants Andrew J. Filipowski (Chief Executive Officer and Chairman of the Board of Directors) and Michael P. Cullinane (Chief Financial Officer and Executive Vice President) with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Throughout the Class Period, defendants issued a series of material misrepresentations to the market between November 12, 2001, and February 18, 2003, which served to artificially inflate the price of divine securities. As alleged in the Complaint, defendants failed to disclose and misrepresented the following material adverse facts: (1) divine was engaged in a scheme of inflating its revenues by approximately $65 million by instructing employees of its wholly-owned subsidiary, RoweCom, to offer discounts to library customers that paid cash in advance -- months before payments were due to publishers -- even though divine had no plan to pay its obligations to publishers; (2) divine was fraudulently diverting nearly $74 million from RoweCom's operations; (3) divine lacked adequate financial and internal controls with respect to its RoweCom operations; and (4) as a result of the foregoing, divine lacked a reasonable basis to project profitability by year-end or an ability to maintain its operations without bankruptcy protections.
On February 18, 2003, the close of the Class Period, divine announced that "despite efforts over the past several months to minimize operating expenses and various liabilities, its board of directors has determined that it must seek alternatives to protect the value and viability of its operations. As a result, divine has engaged Broadview International LLC as advisors to assist in exploring strategic options, which may include asset divestitures, comparable transactions, and/or the filing of a voluntary petition under Chapter 11 of the United States Bankruptcy Code." In response to this announcement, the price of divine stock declined precipitously. During the Class Period, divine completed two acquisitions, among numerous others -- acquiring Viant Corporation and Delano Technology Corporation -- using its common stock as currency.
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 July 28, 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