NEW YORK, Jan. 21, 2009 (GLOBE NEWSWIRE) -- Labaton Sucharow LLP filed a class action lawsuit on January 21, 2009 in the United States District Court for the Eastern District of Missouri, on behalf of purchasers of the securities of KV Pharmaceutical Company ("KV" or the "Company") (NYSE:KV-A) (NYSE:KV-B) between May 31, 2007 and November 12, 2008, inclusive (the "Class Period"). The complaint names KV, Marc S. Hermelin, Ronald J. Kanterman, and Richard H. Chibnall as defendants (collectively, "Defendants"). The complaint alleges that during the Class Period, Defendants violated the Securities Exchange Act of 1934 by issuing various materially false and misleading statements about KV's compliance with federal regulations pertaining to the manufacture and marketing of certain generic drugs, as well as KV's financial well-being, business operations and prospects, which had the effect of artificially inflating the market price of the Company's securities.
If you are a member of this class you can view a copy of the complaint and join this class action online at http://www.labaton.com/en/cases/KV-Pharma.cfm.
The complaint alleges, inter alia, that the Defendants made materially false and misleading statements because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that KV's manufacturing facilities were in disarray, resulting in the manufacture of unsafe drug products that would have to be recalled due to the fact that they may contain oversized tablets; (2) that KV's management engaged in misconduct by failing to recall the Company's unsafe drug products; (3) that KV's manufacturing facilities failed to comply with federal regulations including FDA requirements and guidelines, generally referred to as current "Good Manufacturing Practices"; (4) that manufacturing disruptions and inefficiencies were resulting in a material backlog of unshipped customer orders thus further eroding the Company's revenues and earnings; (5) that the Company failed to write-off at least $24 million in inventories of discontinued products, seized by the U.S. Attorney for the Eastern District of Missouri due to defendants' violation of FDA enforcement notices; (6) that KV's post-January 2008 sales of generics were being negatively impacted by material price erosion following the expiration of the Company's exclusive sales period for the drug metoprolol succinate; (7) that KV's financial statements failed to comply with GAAP; and (8) that, based on the foregoing, Defendants' statements concerning the Company's current and future financial prospects were lacking in a reasonable basis when made and therefore materially false and misleading when made.
On November 13, 2008, KV announced that it would be unable to file its Form 10-Q for the quarter ended September 30, 2008 due to a continuing investigation by the Company's Audit Committee into allegations of management misconduct concerning recalls of the Company's drug products. On this news, the price of KV common stock fell from $14.26 per share to $5.90 per share, a drop of nearly 59%, on extremely heavy volume.
Plaintiff is represented by the law firm Labaton Sucharow LLP. Labaton Sucharow is one of the country's premier national law firms that represent institutional and individual investors in class action, complex securities and corporate governance litigation. The firm has been a champion of investor rights for over 40 years and has been recognized for its reputation for excellence by the courts. More information about Labaton Sucharow is available at www.labaton.com.
If you bought KV securities between May 31, 2007 and November 12, 2008, inclusive, you may move to serve as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the United States District Court for the Eastern District of Missouri no later than February 2, 2009. A lead plaintiff is a court-appointed representative for absent class members. You do not need to seek appointment as lead plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as lead plaintiff or have any questions about the lawsuit, you may contact one of our representatives or Alan I. Ellman, Esq. of Labaton Sucharow, at 800-321-0476 or (212) 907-0700, or via email at aellman@labaton.com.