NEW YORK, Sept. 28, 2004 (PRIMEZONE) -- Murray, Frank & Sailer LLP announces that a class action lawsuit was filed in the Southern District of New York on behalf of a class (the "Class") consisting of all persons who purchased or otherwise acquired the securities of Tommy Hilfiger Corporation ("Tommy Hilfiger" or the "Company") (NYSE:TOM) between November 3, 1999 and September 24, 2004, inclusive (the "Class Period").
The complaint charges Tommy Hilfiger, Joel J. Horowitz, Joseph Scirocco, Joel H. Newman, Silas K.F. Chou, Lawrence S. Stroll, James P. Reilly, and David F. Dyer with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the defendants shifted profits to lower-tax jurisdictions by paying buying-agency commissions to other Tommy Hilfiger subsidiaries; (2) more specifically, the defendants reported revenue generated in the United States as if it were earned in a foreign division, thereby effectively lowering the Company's tax rate; (3) that as a result of this, the Company's financial results were in violation of generally accepted accounting principles ("GAAP"); (4) that the Company lacked adequate internal controls; and (5) that as a result of the above, the Company's financial results were materially inflated at all relevant times.
On September 24, 2004, after the market closed, Tommy Hilfiger announced that Tommy Hilfiger U.S.A., Inc. ("THUSA"), a wholly owned subsidiary of Tommy Hilfiger, had received a grand jury subpoena issued by the U.S. Attorney's Office for the Southern District of New York seeking documents generally relating to THUSA's domestic and/or international buying office commissions since 1990. Certain of THUSA's current and former employees had also received subpoenas. According to the Company, THUSA pays buying office commissions to a non-U.S. subsidiary of Tommy Hilfiger to provide or otherwise secure certain services, including product development, sourcing, production scheduling and quality control functions. It appears that the investigation is focused on whether the commission rate is appropriate.
News of this shocked the market. On September 27, 2004, shares of Tommy Hilfiger fell $2.87 per share, or 21.79 percent, to close at $10.30 per share on unusually high trading volume.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or acquired the common stock of Tommy Hilfiger between November 3, 1999 and September 24, 2004, inclusive, and sustained damages, you may, no later than November 29, 2004, move the Court to serve as lead plaintiff of the class. Shareholders outside the United States may also join the action, regardless of where they live or which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Aaron D. Patton of Murray, Frank & Sailer LLP.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca