BALA CYNWYD, Pa., June 3, 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 Texas, Sherman Division on behalf of all purchasers of the common stock of Daisytek International Corporation ("Daisytek" or the "Company") (Nasdaq:DZTK) from November 9, 2001 through April 28, 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 November 9, 2001 and April 28, 2003, thereby artificially inflating the price of Daisytek securities.
During the Class Period, the Company was faced with the predicament of needing to secure capital financing in order to maintain business operations. As such, the Company issued statements that failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its financial results through its improper accounting of uncollectible receivables and vendor rebate receivables; (2) that the Company's accounting practices were in violation of generally accepted accounting principles ("GAAP"); (3) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (4) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times.
On April 28, 2003, the truth emerged about the Company's financial condition when Daisytek issued a press release, after the close of the market, announcing that the Company expected significant losses in the fourth quarter of fiscal year 2003. News of this shocked the market. Shares of Daisytek fell 70.88% on increased volume and closed at $0.53 on April 29, 2003. After the close of the Class Period, the Company announced that its CEO and CFO, defendants James R. Powell and Ralph Mitchell, respectively, had resigned from the Company on May 5, 2003.
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/currentcases.cfm.
If you are a member of the class described above, you may, not later than July 29, 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