HARTFORD, Conn., March 28, 2007 (PRIME NEWSWIRE) -- The law firm of Schatz Nobel Izard, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Central District of California on behalf of all persons who purchased the common stock of U.S. Auto Parts Network, Inc. ("U.S. Auto Parts") (Nasdaq:PRTS) pursuant to the Company's Registration Statement and Prospectus (collectively, the "Registration Statement") issued in connection with its February 8, 2007 initial public offering ("IPO").
The Complaint alleges that U.S. Auto Parts and certain of its officers and directors violated Federal Securities laws. Specifically, the Registration Statement failed to disclose the following facts: (i) the Company was having difficulty with the integration of PartsBin -- a company it acquired in May 2006 -- due in large part to the different distribution methods utilized by U.S. Auto Parts and PartsBin; (ii) PartsBin was suffering from internal control deficiencies which caused the following problems for U.S. Auto Parts: (a) the Company was having trouble filling customer orders under its drop-ship distribution system and was required to issue credits to its customers for out-of-stock products that it had previously recorded as sales; and (b) products offered via the drop-ship distribution method generated lower product margins than those offered under the stock-and-ship distribution method, which further eroded and would continue to erode the Company's already suffering margins; and (iii) the Company had experienced a disastrous fourth quarter which would result in disappointing 2006 results.
On March 20, 2007, after the market closed, U.S. Auto Parts announced disappointing fourth quarter 2006 and year end results. On this news, U.S. Auto Parts' stock price collapsed from $11.07 per share on March 20, 2007 to close at $6.49 per share on March 21, 2007.
If you are a member of the class, you may, no later than May 28, 2007, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz Nobel Izard, P.C. has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz Nobel Izard, P.C. toll-free at (800) 797-5499, or by e-mail at firm@snlaw.net, or visit our website: www.snilaw.com.