NEW YORK, Aug. 19, 2005 (PRIMEZONE) -- Abbey Gardy, LLP is investigating securities fraud claims against American Italian Pasta Company ("AIPC" or the "Company") (NYSE:PLB) and certain of its officers and directors.
A lawsuit seeking class action status has been filed in the United States District Court for the Western District of Missouri on behalf of all persons who purchased the common stock of AIPC between October 25, 2000 and August 9, 2005 (the "Class Period"). The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of AIPC securities.
Specifically, the complaint alleges that 1) AIPC failed to disclose or misrepresented that the Company failed to properly expense $6.6 million in promotional allowances and deduction receivables; 2) the Company failed to take timely write-downs; 3) the Company maintained inadequate reserves for slow moving, damaged, and discontinued inventories; 4) the Company failed to record $1.9 million in certain fixed asset retirements; and 5) as a result the AIPC's financials were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP").
On August 9, 2005, after the market closed, AIPC announced a $60.7 million charge and a Securities and Exchange Commission ("SEC") inquiry. More specifically, AIPC stated the SEC was investigating the Company for various unspecified financial restatements and for transactions of the company's stock by outsiders in late 2004 and early 2005. Additionally, AIPC stated that it was delaying the release of its full financial results for the third fiscal quarter ended July 1, 2005 and was also delaying the filing of its third quarter Form 10-Q with the SEC. Moreover, AIPC stated that its Audit Committee is conducting an internal investigation of certain accounting procedures and practices and certain other matters. On news of this, shares of AIPC fell $7.66 per share, or 36.58 percent, to close at $13.28 per share.
Abbey Gardy has not filed a lawsuit against the defendants; however, if you purchased or otherwise acquired AIPC securities and either lost money on the transaction or still hold the securities and would like to know more about the case filed or our investigation, please contact:
Susan Lee or Nancy Kaboolian, Esq. Abbey Gardy, LLP 212 East 39th Street New York, New York 10016 (212) 889-3700 (800) 889-3701 (Toll Free) Or e-mail Susan Lee at slee@abbeygardy.com
The attorneys at Abbey Gardy, LLP have extensive experience in securities class action cases and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. If you would like to discuss this action or if you have any questions concerning your rights as a potential class member or lead plaintiff, please contact Abbey Gardy, LLP.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.