NEW YORK, June 3, 2003 (PRIMEZONE) -- Wechsler Harwood LLP today announced that a securities class action has been commenced on behalf of persons or entities who purchased or otherwise acquired the securities of Blue Rhino Corporation ("Blue Rhino" or the "Company") (Nasdaq:RINO) from August 15, 2002 through February 5, 2003, inclusive (the "Class Period").
The case, entitled Frenzik v. Blue Rhino Corp., et al., was filed in the United States District Court for the Central District of California against defendants Blue Rhino and certain of its senior officers and directors. A copy of the Complaint is available from the Court or can be viewed on the Wechsler Harwood web site at: www.whesq.com or can be obtained by contacting the firm Toll Free at (877) 935-7400 (ext. 251).
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 August 15, 2002 and February 5, 2003, thereby artificially inflating the price of Blue Rhino common stock and inflicting damages on investors.
The Complaint further charges that defendants issued a series of materially false and misleading statements concerning the Company's operations and financial results. In particular, the Complaint alleges that defendants' statements were materially false and misleading because defendants failed to disclose and misrepresented that the 10 distributors acquired on November 22, 2002, which included Platinum Propane L.L.C. ("Platinum") and Ark Holding Co., L.L.C. ("Ark"), were not healthy, highly profitable, and independent of the Company as portrayed by Blue Rhino. In fact, on a combined basis, these distributors had lost $2.8 million in the first ten months of 2002 and owed Blue Rhino $5 million in cash advances in addition to their $2.8 million of debt. Also, the defendants failed to disclose and misrepresented that: (a) Platinum was in violation of its debt covenants for 2001; (b) the Company misrepresented that the purchase price of the acquisitions only totaled $21 million when in fact the true price of the acquisitions was $32 million; (c) Blue Rhino was beginning to see a decline in earnings from the Overfill Protection Device ("OPD") regulations; (d) the Company's earnings projections were lacking in any reasonable basis when made; and (e) that the false and misleading information disseminated by the defendants caused Blue Rhino's securities to trade at artificially inflated prices.
On February 5, 2003, the Company filed a current report on Form 8-K with the SEC. Therein, the Company for the first time, and contrary to its previous statements, disclosed that the true acquisition price paid by the Company for the 10 distributors in November 2002 was $32 million; that the acquired distributors had a net loss of $2,804,000; and that the acquired distributors were not healthy, highly profitable, and independent of the Company. News of the Company's 8-K filing shocked the market on February 6, 2003. On that day, shares of the Blue Rhino fell $1.56 or 11% to close at $12.59, down from its previous day close of $14.15.
If you are a member of the class described above, you may, not later than July 18, 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. 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. You may retain Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca