NEW YORK, Dec. 12, 2004 (PRIMEZONE) -- Murray, Frank & Sailer LLP announces a class action lawsuit on behalf of purchasers of the securities of Star Gas Partners LP ("Star Gas" or the "Company") (NYSE:SGU) (NYSE:SGH) between December 4, 2003 and October 18, 2004, inclusive (the "Class Period").
The complaint alleges that 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. The true facts, which were known by each of the defendants but concealed from the investing public during the Class Period, were as follows: (a) that the Company was experiencing massive delays in the centralization of its dispatch system and causing its customers to flee to competitors; (b) that the Company's Petro heating oil division's business process improvement program was faltering and not generating the benefits claimed by defendants; (c) that contrary to defendants' earlier indications, the Company was not able to increase or even maintain profit margins in its heating oil segment; (d) 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 basis; and (e) that 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.
On October 18, 2004, TheStreet.com issued an article, entitled "Stocks In Motion: Star Gas," which stated: "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.
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 otherwise acquired Star Gas securities on any exchange between December 4, 2003 and October 18, 2004, and sustained damages, you may, no later than December 20, 2004, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of 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 as lead plaintiff 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.