DALLAS, April 7, 2005 (PRIMEZONE) -- The law firm of Baron & Budd, P.C. announces that a class action lawsuit has been filed in the United States District Court for the Eastern District of Michigan on behalf of purchasers of Collins & Aikman Corp. (NYSE:CKC) ("Collins & Aikman" or the "Company") securities during the period between May 6, 2004 and March 17, 2005, inclusive (the "Class Period").
The Complaint alleges that Collins & Aikman violated federal securities laws by issuing false or misleading information and that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them. Specifically, the Complaint alleges: (a) the Company was not properly accounting for certain supplier rebates; (b) that the Company's financial statements would require net adjustments of approximately $10-$12 million of which $8-$10 million impact the previously reported nine months ended September 30, 2004; (c) that the Company's financial statements were not prepared in compliance with the Generally Accepted Accounting Principles ("GAAP"); (d) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (e) that as a result of the foregoing, the Company's financial statements were materially overstated at all relevant times.
On March 17, 2005, Collins & Aikman issued a press release stating that after the Company's internal review of vendor rebates covered an aggregate of approximately $88 million of vendor transactions in fiscal years 2002 through 2004, the Company's management believed that their financial statements required net adjustments of approximately $10-$12 million, the majority of which primarily occurred in the previous nine months ended September 30, 2004. The Company's shares reacted negatively to this news and fell $0.39, down 23.93% from a previous closing price at $1.63, and a drop of 80% from its class period high of $6.17.
If you acquired the securities of Collins & Aikman Corporation during the Class Period and meet certain legal requirements, you may, no later than June 6, 2005, move for appointment as lead plaintiff on behalf of the proposed class.
If you are a member of this class and would like to take action in this suit, please visit Baron & Budd online at www.securitiesactions.com. Information on your legal rights can be obtained by contacting the law firm of Baron & Budd, P.C.
About Baron & Budd, P.C.
Since 1977, the law firm of Baron & Budd, P.C. has championed the rights of people and communities harmed by corporate misconduct. With over 70 attorneys and offices in Texas, Illinois, Ohio, Louisiana, and New York, Baron & Budd enjoys a national reputation as a leader of the plaintiff's bar. The firm represents individuals with mesothelioma and other diseases caused by asbestos; leukemia caused by benzene; injuries caused by other toxic substances and unsafe pharmaceuticals; water authorities seeking clean-up costs for drinking water contamination; securities investors defrauded by corporate wrongdoing; and consumers in class actions. For more information on the firm, call 1-800-222-2766 or visit www.baronandbudd.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca