NEW YORK, Nov. 18, 2005 (PRIMEZONE) -- Wechsler Harwood LLP today announced that it filed a Federal securities fraud class action suit on behalf of all purchasers of the securities of Tempur-Pedic, International, Inc. (NYSE:TPX) ("Tempur-Pedic" or the "Company") between April 22, 2005 and September 19, 2005 inclusive (the "Class Period").
The complaint, captioned EUGENE C. ONORATO v. TEMPUR-PEDIC INTERNATIONAL, INC., et al., was filed in the United States District Court for the Eastern District of Kentucky (Lexington Division) and charges Tempur-Pedic, Dale E. Williams, Robert B. Trussell, Jr., H. Thomas Bryant and P. Andrews McLane with violations of the Securities Exchange Act of 1934. The complaint specifically alleges that by the beginning of the Class Period, investors were concerned that the Company's competitors, (such as Sealy, Serta and Simmons), were making significant inroads into the visco-elastic market that would challenge Tempur-Pedic's dominance or, potentially erode Company profits if Tempur-Pedic was forced to slash prices to successfully compete. Defendants assuaged these concerns by knowingly or with reckless disregard misrepresenting that Tempur-Pedic's business was not suffering from the effects of competition and would continue to grow strongly. As the Class Period progressed, defendants reiterated aggressive sales and earnings guidance for 2005, even after the Company had actually begun to experience a slowdown. The Complaint charges defendants with knowingly or recklessly failed to disclose that: (1) contrary to defendants' express representations the demand for Tempur-Pedic's expensive visco-elastic mattresses had, in fact, slowed; (2) the Company faced increased competition in its niche sector in the form of cheaper offerings from its competitors; and (3) as a consequence of the foregoing, defendants' encouraging statements about Tempur-Pedic's business prospects and market position lacked in any reasonable basis.
The complaint also alleges that defendants were motivated to commit the wrongdoing alleged herein in order to sell their personally held Tempur-Pedic stock at artificially inflated prices. During the Class Period, insiders and entities associated with insiders, sold a total of 5,620,591 shares of Tempur-Pedic common stock at artificially inflated prices, for proceeds of $131,910,207. $124,550,000 of that amount was sold by TA Associates. TA Associates is a controlling shareholder of the Company and has two nominee directors on Tempur-Pedic's board of directors -- Jeffrey S. Barber and Chairman P. Andrews McLane. Mr. McLane is also a managing director of TA Associates.
On September 19, 2005, Tempur-Pedic lowered its financial guidance for fiscal 2005. Tempur-Pedic attributed this change to a number of factors, including competition that it had previously claimed was not and would not negatively impact the Company in a manner large enough to require 2005 guidance to be lowered. In fact, Tempur-Pedic had reiterated this assurance less than a month before the September 19 announcement. On this news, shares of Tempur-Pedic common stock dropped $4.68 per share, or 28.5 percent, to close at $11.70 per share, on heavy trading volume.
If you are a member of the class described above, you may, not later than December 6, 2005, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 Virgilio Soler, Jr. Wechsler Harwood Shareholder Relations Department: vsoler@whesq.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca