NEW YORK, July 31, 2006 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP ("Pomerantz") (www.pomerantzlaw.com) has filed a class action lawsuit against Par Pharmaceutical Companies, Inc. ("Par" or the "Company") and certain of its officers. The class action was filed in United States District Court District of New Jersey, on behalf of purchasers of the common stock of the Company during the period from April 29, 2004 to July 5, 2006, inclusive (the "Class Period"). The complaint alleges violations of Sections 10(b) and 20(a) the Securities Exchange Act of 1934 and Rule10b-5 promulgated thereunder.
Par, headquartered in New Jersey, develops, manufactures and markets more than 110 generic drugs and innovative branded pharmaceuticals for specialty markets. The Complaint alleges that throughout the class period, defendants reported earnings that were materially inflated as a result of accounting errors including an understatement of accounts receivable reserves. The Company has now admitted that the overstatement of its revenues has resulted in Par overpaying its business partners in various profit sharing arrangements. As a result of the Company's internal review of its trade accounts receivable balances, the Company has decided to restate its previously reported financial statements for fiscal year 2004 and 2005 and the first quarter of 2006. In addition, Par announced it will write-off inventory in an amount up to $15 million due to flawed physical inventory procedures.
In response to these revelations, on July 6, 2006, Par stock fell $4.78 per share, losing nearly 26% of its value in one day on extremely high volume of over 9 million shares traded, to close at $13.47 per share. Additionally, the Company has been informed by a letter from the staff of the Securities and Exchange Commission, dated July 7, 2007, that the SEC is conducting an informal investigation of the Company related to the Restatement.
If you purchased the securities of Par Pharmaceutical during the Class Period, you have until September 15, 2006, to move the Court to appoint you as lead plaintiff for the Class. A Lead plaintiff must meet certain legal requirements. If you wish to review a copy of the Complaint, to discuss this action, or have any questions regarding the role of a lead plaintiff, please contact Teresa L. Webb (tlwebb@pomlaw.com) or Carolyn S. Moskowitz (csmoskowitz@pomlaw.com) of the Pomerantz Firm at 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz Firm, which has offices in New York, Chicago and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. For more information about the Firm, visit our web site at www.pomlaw.com.