NEW YORK, June 25, 2003 (PRIMEZONE) -- The law firm of Kirby McInerney & Squire, LLP announces that a class action lawsuit has been commenced 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) common stock during the period from November 12, 2001 through February 18, 2003, inclusive (the ``Class Period'').
Please visit our website, which offers summary and detailed information concerning the suit at http://www.kmslaw.com/new_cases/Divine/Divine.htm or contact us by phone at (888) 529-4787 or by email at emui@kmslaw.com for more information.
The action charges Divine and certain of its senior officers with violations of Sections 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The alleged violations stem from the dissemination of false and misleading statements, which had the effect -- during the Class Period -- of artificially inflating the price of Divine's shares.
Throughout the Class Period, defendants issued a series of material misrepresentations to the market, 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.
Additionally, as alleged in the Complaint, Divine filed a Registration Statement on Form S-4 in connection with its acquisition of Viant Corp., on June 19, 2002. That Registration Statement was false and misleading as it incorporated by reference Divine's materially false and misleading financial results, as previously reported on Forms 10-K and 10-Q with the SEC. During the Class Period, Divine completed its acquisition of Viant Corp., among other acquisitions, using its artificially inflated common stock as currency.
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.
Kirby McInerney & Squire, LLP has specialized in complex litigation, including securities class actions, for several decades. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and its achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general, or about the role of the lead plaintiff in a securities class action can be obtained through Kirby McInerney & Squire's website at http://www.kmslaw.com.
If you are a member of the class described above, you may, no later than July 28, 2003, move the Court to serve as lead plaintiff of the class, if you so choose, pursuant to the Private Securities Litigation Reform Act of 1995 (the ``PSLRA''), 15 U.S.C. section 78u-4(a). A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. 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 seek appointment as a lead plaintiff. For more information about the case, its claims, and your rights, you can contact:
Ira M. Press, Esq. Elaine Mui
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca