NEW YORK, Sept. 30, 2005 (PRIMEZONE) -- Murray, Frank & Sailer LLP has filed a class action lawsuit in the United States District Court for the District of Colorado on behalf of shareholders who purchased or otherwise acquired the securities of Red Robin Gourmet Burgers, Inc. ("Red Robin" or the "Company") (NASDAQ:RRGB) between November 8, 2004 through August 11, 2005, inclusive (the "Class Period").
The complaint charges Red Robin and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Red Robin, together with its subsidiaries, operates a casual dining restaurant chain that serves gourmet burgers in the United States and Canada.
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.
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.
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.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than fifteen years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or otherwise acquired Red Robin securities on any world exchange between November 8, 2004 through August 11, 2005, and sustained damages, you may, no later than October 14, 2005, 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, Christopher Hinton or Bradley Dyer of Murray, Frank & Sailer LLP.