DALLAS, April 25, 2005 (PRIMEZONE) -- The law firm of Baron & Budd, P.C. announces that a class action lawsuit has been filed on behalf of purchasers of Delphi Corporation (NYSE:DPH) ("Delphi" or the "Company") securities during the period between April 12, 2000 and March 3, 2005, inclusive (the "Class Period").
The Complaint alleges that Delphi Corporation 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) that the Company's improper accounting for off-balance sheet financing transactions in 2000 for $200 million, and financing activities in 2000 for $20 million, caused an overstatement of the Company's cash flow from operations, which resulted in a $220 million restatement; (b) that the Company employed improper accounting practices to overstate pretax earnings by $100 million for 2000; (c) that the Company prematurely recognized revenue from technology contracts and rebates when they should have been recognized over the duration of the contract; (d) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (e) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (f) that as a result, the Company's earnings and financial results were materially overstated at all relevant times.
Delphi announced on October 18, 2004 that the Audit Committee of the Company's Board of Directors was conducting an internal review in regards to the accounting methods employed for certain transactions valued at $86 million between Delphi and Electronic Data Systems Corp. and Delphi's pension accounting. This review was initiated after an investigation was commenced by the Securities and Exchange Commission ("SEC") that was disclosed on a Form 8-K filed on September 29, 2004. The decision to delay the Company's filing of the Form 10-Q was also made in light of the fact that the Company's independent registered accounting firm, "Deloitte & Touche LLP ("Deloitte"), was unable to complete its review of the unaudited Consolidated Financial Statements for the three and nine months ended September 30, 2004 due to the ongoing status of the internal review by the Audit Committee of the Board of Directors.
Due to the restatements, the investigation by the SEC, and the internal review, the Audit Committee announced that they had accepted the resignation of Vice Chairman and Chief Financial Officer, Alan Dawes, after expressing a loss of confidence in him.
Immediately after the Company's March 4, 2004 release, The Company's shares plummeted on this news and fell to $5.46, down 14% from a previous closing price at $6.37. The stock currently trades down 40% from the date of the revelation of the Company's flawed accounting.
If you acquired the securities of Delphi Corporation during the Class Period and meet certain legal requirements, you may, no later than May 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.