NEW YORK, April 4, 2008 (PRIME NEWSWIRE) -- Northern District of Texas federal Judge David C. Godbey on March 24th, 2008 refused to dismiss a shareholder class-action lawsuit against Texas-based Home Solutions of America Inc. (Pink Sheets:HSOA).
The investor lawsuit, filed by national class action law firm Scott+Scott LLP (www.scott-scott.com), claims that Home Solutions knowingly misrepresented and exaggerated the company's financial performance and prospects, the value of corporate acquisitions, supposed new contract awards and expanded business relationships to artificially inflate Home Solutions' stock price for the purposes of funding new acquisitions. The lawsuit further claims that these misrepresentations enabled company insiders to reap enormous personal gains on the sale of their Home Solutions stock.
The Court's analysis centered on Home Solutions' May 23, 2007 press release in which the company, according to plaintiffs, gave investors "the false impression that Home Solutions was awarded business by an independent and established company with business of its own." The lawsuit alleges that the "independent and established company" referred to by Home Solutions actually had no business of its own, had no working phone number, had been incorporated five days before the press release, and was provided with nearly all of its capital by Home Solutions. Over defendants' objections, the Court upheld the plaintiffs' claim that the press release was misleading.
The suit seeks class-action status for those investors who bought Home Solutions stock at artificially inflated prices. Home Solutions filed its motion to dismiss the case on June 6, 2007.
Scott+Scott LLP is a law firm with significant experience in prosecuting investor class actions. The firm is litigating major securities, antitrust and employee retirement plan actions throughout the United States, including, among others, actions against Lehman Brothers Holdings Inc. (NYSE:LEH), General Motors Corporation (NYSE:GM), FX Energy Inc. (Nasdaq:FXEN) and Diebold Inc. (NYSE:DBD). The firm represents pension funds, foundations, individuals and other entities worldwide.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca