COLCHESTER, Conn., June 29, 2006 (PRIMEZONE) -- Today, Scott+Scott, LLC, filed an amended class action against Home Solutions of America, Inc. ("Home Solutions" or the "Company") (AMEX:HOM) and certain officers and directors in the U.S. District Court for the Northern District of Texas. The action is on behalf of Home Solutions securities purchasers during the period April 11, 2006 and June 6, 2006, inclusive (the "Class Period"), for federal securities law violations. The complaint alleges that defendants made false and misleading statements regarding the Company's revenue opportunities. As a result, the price of the Company's securities was inflated during the Class Period, thereby harming investors. Meanwhile, the Company's officers and directors aggressively sold shares of their Home Solutions stock, resulting in proceeds of approximately $12.2 million. The complaint earlier mistakenly reported insider proceeds at over $15.7 million.
If you purchased Home Solutions securities during the Class Period and wish to serve as a lead plaintiff in the action, you must move the Court no later than August 21, 2006. Any purported class member may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott (scottlaw@scott-scott.com, 800/404-7770, 860/537-5537) or visit the Scott+Scott website, www.scott-scott.com, for more information. There is no cost or fee to you.
According to the complaint, on April 11, 2006, Home Solutions announced it had been awarded a contract valued at up to $20 million, to provide infrastructure support for Hurricane Katrina rebuilding efforts. Following this, the Company announced a string of contract awards, including substantial contracts with Home Depot Inc. and American Renaissance Homes ("ARH").
On June 6, 2006, however, the Company issued a shocking press release, revealing that it was, in fact, lending up to $800,000 to ARH for "working capital," secured by its modular homes and land. As the complaint alleges, defendants' prior representations regarding the dramatic growth in revenues based on the announced contract opportunities were false and misleading, concealing from the investment community the Company's inability to dramatically expand both revenues and margins, in a low-margin and highly competitive market space. On this news, Home Solutions' stock price plummeted, losing 29.1% or $2.80, to close on June 6, at $6.80, on unprecedented volume of 26.2 million shares, over eighteen times normal trading volume.
The plaintiff is represented by Scott+Scott, a firm with significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca