NEW YORK, June 20, 2003 (PRIMEZONE) -- A class action lawsuit was filed in the United States District Court for the Northern District of Illinois, Eastern Division, civil action no. 03C-4116 (the "Complaint"), 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 14, 2003, inclusive (the "Class Period").
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, 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.
If you purchased or otherwise acquired divine, inc. securities during the Class Period, you may request, by July 28, 2003, that the Court appoint you as lead plaintiff. 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, which has extensive experience in prosecuting investor class actions involving financial fraud, has prosecuted securities, antitrust and consumer class actions for over 10 years. For more information about Wechsler Harwood LLP, please visit its website at www.whesq.com.
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 David Leifer, Wechsler Harwood Shareholder
More information on this and other class actions can be found on the Class Action Newsline at http://www.primezone.com/ca