COLCHESTER, Conn., Oct. 21, 2004 (PRIMEZONE) -- Scott + Scott, LLC has filed a complaint charging Star Gas and certain of its officers and directors with violations of the Federal Securities Laws (Securities Exchange Act of 1934). Star Gas is a holding company for regulated utilities and other unregulated businesses.
Scott + Scott, LLC (StarGasSecuritiesLitigation@scott-scott.com or nrothstein@scott-scott.com), a U.S. law firm based in Connecticut with offices in Ohio and California (http://www.scott-scott.com ), announces that it has filed a complaint in the United States District Court for the District of Connecticut on behalf of all purchasers of securities from December 4, 2003 to October 18, 2004 (the "Class Period") inclusive. Star Gas Partners, Inc. ("Star or the Company") (NYSE:SGU) (NYSE:SGH). You can contact Scott + Scott, LLC at 800/404-7770 (EDT) or 800/332-2259 (PST); you can also dial direct at 860/537-3818 in Connecticut or 619/233-4565 in California. Those who purchased securities in Star Gas can contact the firm to further discuss this matter.
This is an action on behalf of purchasers of Star Gas Partners, L.P. publicly traded securities during the period from December 4, 2003 to October 18, 2004. Star Gas is a diversified home energy distributor and service provider, specializing in heating oil, propane, natural gas and electricity. During the Class Period, defendants caused Star Gas's shares to trade at artificially inflated levels through the issuance of false and misleading statements.
As a result of this inflation, Star Gas was able to complete a secondary public offering of 1.3 million common units and two note offerings totaling $65 million, raising net proceeds of $95 million during the Class Period.
On October 18, 2004, TheStreet.com issued an article entitled "Stocks In Motion: Star Gas". The article stated in part: "Earnings at Star Gas' heating oil unit are expected to decline substantially, the company said, which will not permit it to meet the borrowing conditions under its working capital line. Star is currently in talks with lenders to modify conditions and other terms that would allow its business unit to operate through the winter. If lenders do not agree, however, to offer modified terms, Star said it could be forced to seek alternative financing on "extremely disadvantageous" terms or even be forced to seek bankruptcy protection."
On this news, Star Gas's stock dropped to $4.32 per share from a closing price of $21.60 on the previous trading day. The true facts, which were known by each of the defendants but concealed from the investing public during the Class Period, were that the Company was experiencing massive delays in the centralization of its dispatch system and causing its customers to flee to competitors; that the Company's Petro heating oil division's business process improvement program was faltering and not generating the benefits claimed by defendants; that contrary to defendants' earlier indications, the Company was not able to increase or even maintain profit margins in its heating oil segment; and that the Company's second quarter 2004 claimed profit margins were an aberration and not indicative of the Company's success or ability to pass on the heating oil price increase because the Company had earlier acquired heating oil (sold in the second quarter) at a much lower cost.
As a result, defendants were facing imminent bankruptcy and would no longer be able to service the Company's debt, all of which would halt the Company's ability to maintain the Company's credit rating and/or obtain future financing. Star Senior Notes: Star has $265 million in principal amount of unsecured senior notes due February 13, 2013 at the parent company level. Star has retained Peter J. Solomon Company, LP an independent investment banking firm, to advise Star on possible restructuring alternatives and other strategic options.
If you are a member of the class described above, you may, not later than sixty days from today move the Court to serve as lead plaintiff of the class, if you so choose. 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. Scott + Scott, LLC, which prides itself on its dedication to the class, recently won an important decision on behalf of its Lead Plaintiff halting a settlement that was deemed inadequate by the Court: http://www.washingtonpost.com/wp-dyn/articles/A13102-2004Sep10.html .
Scott + Scott, LLC, a Connecticut-based law firm with offices in Ohio and California, is a law firm with a national practice and reputation. Scott + Scott dedicates itself to client communication and satisfaction. The firm is currently litigating major securities, antitrust and employee retirement plan cases throughout the United States and represents pension funds, charities, foundations, individuals and other entities worldwide -- in both class and non-class cases. Please visit our website at http://www.scott-scott.com to learn more about the firm, its practice and other cases. If you wish to discuss this action with an attorney or have any questions concerning this notice, your rights or any matter within our expertise, please contact attorney Neil Rothstein at nrothstein@scott-scott.com or by calling 800-404-7770 (EDT) or 800-332-2259 (PDT). You can dial direct in California at 619-233-4565. Scott + Scott, LLC is located at 108 Norwich Avenue, Colchester, CT 06415; phone: 860/537-3818; fax: 860/537-4432. This release is issued in accordance with the applicable federal law of the United States.