NEW YORK, June 25, 2009 (GLOBE NEWSWIRE) -- Pomerantz Haudek Grossman & Gross LLP (www.pomerantzlaw.com) has been appointed Co-Lead Counsel in the class action against Perrigo Company (NYSE:PRGO) pending in the United States District Court for the Southern District of New York -- Warner vs. Perrigo Company, et al., No. 09 Civ. 2255 (TPG).
The Warner Complaint alleges that, during the Class Period (November 6, 2008 through February 2, 2009), defendants misled investors regarding the Company's losses in Auction Rate Securities ("ARS") held by the Company. In January and February of 2008, ARS auctions began to fail, limiting the liquidity of these securities. Investment banks that collected lucrative fees for underwriting the issuance of ARS and conducting the auctions had secretly been buying ARS in their own auctions whenever necessary to keep auctions from failing. By early 2008, however, the banks' balance sheets were stretched too thin for the practice to continue and the market for ARS collapsed.
Perrigo was left holding $18 million of ARS when the market froze. With few secondary markets and virtually no liquidity, the value of most ARS plummeted, even though the issuers were not in default. However, because the Attorneys General for New York and Massachusetts, as well as the SEC, initiated investigations and/or proceedings against many of the banks that underwrote ARS and conducted the auctions, one bank after another began to redeem the ARS their clients had purchased. Perrigo had a reasonable expectation of redeeming its $18 million in ARS until September 15, 2008. On that date, Lehman Brothers Holdings, Inc. ("Lehman") declared bankruptcy. Lehman was the bank that underwrote and sold the ARS to Perrigo. On November 6, 2008, the beginning of the Class Period, defendants reported the "fair value" of Perrigo's ARS as $14,500,000, when in fact, the entire ARS should have been written off completely. Indeed, three months later, on February 3, 2009, defendants disclosed, for the first time, that its ARS were underwritten and sold by Lehman, and that Perrigo would have to write off the entire value of its ARS, wiping out over a third of Perrigo's earnings in the quarter. As a result of this disclosure, the stock price plunged 18% from the previous day's closing price on heavy volume, causing massive losses to investors.
If you have any questions or comments regarding this case, you can contact Patrick V. Dahlstrom, pdahlstrom@pomlaw.com, or Jeremy A. Lieberman at jalieberman@pomlaw.com.
The Pomerantz Firm, which has offices in New York, Chicago, Washington, D.C., Columbus, Ohio and the San Francisco Bay area, 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 70 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.