MILWAUKEE, Sept. 10, 2005 (PRIMEZONE) -- Ademi & O'Relly, LLP (http://www.ademilaw.com/cases/RedRobin.php) filed a class action on August 15, 2005, in the United States District Court for the District of Colorado on behalf of purchasers of Red Robin Gourmet Burgers, Inc. ("Red Robin") (Nasdaq:RRGB) common stock during the period between November 8, 2004, and August 11, 2005 (the "Class Period").
If you wish to serve as lead plaintiff, you must move the Court no later than October 14, 2005. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Guri Ademi at 866-264-3995 or via e-mail at gademi@ademilaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.ademilaw.com/cases/RedRobin.pdf. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint alleges that during the Class Period, defendants caused Red Robin's shares to trade at artificially inflated levels by issuing a series of materially false and misleading statements regarding the Company's business and prospects and by concealing improper self dealing by the Company's CEO. This caused the Company's stock to trade as high as $62.38 per share. Defendants took advantage of this inflation, selling or otherwise disposing of 320,000 shares of their Red Robin stock then valued at more than $17 million. On August 11, 2005, Red Robin reported that Q2 2005 results would be worse than expectations due to charges and adjustments to various accounts and that its Chairman, President and CEO had resigned in light of an investigation into his personal use of Company assets. On this news, Red Robin's stock collapsed to as low as $44.13 per share before closing at $45.55 per share on volume of 9.8 million shares.
According to the complaint, 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) the Company lacked requisite internal controls and corporate governance procedures to safeguard the Company from abuse by the CEO of his position at the Company; (b) contrary to defendants' claims of fiscal 2005 growth and profitability, the Company was actually on track for lower results than represented; (c) the Company lacked the necessary personnel to issue accurate financial reports and projections; and (d) as a result of (a)-(c) above, the Company's projections for fiscal year 2005 were grossly inflated. Plaintiff seeks to recover damages on behalf of all purchasers of Red Robin common stock during the Class Period (the "Class").
The plaintiff is represented by Ademi & O'Reilly, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.