NEW YORK, March 5, 2015 (GLOBE NEWSWIRE) -- Pomerantz LLP has filed a class action lawsuit against Corporate Resource Services, Inc. ("Corporate Resource Services" or the "Company") (Nasdaq:CRRS) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 15-cv-01632, is on behalf of a class consisting of all persons or entities who purchased Corporate Resource Services securities between July 1, 2014 and February 6, 2015, inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the "Exchange Act").
If you are a shareholder who purchased Corporate Resource Services securities during the Class Period, you have until May 1, 2015 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Corporate Resource Services, Inc. provides diversified technology, staffing, recruiting, and consulting services in the United States. It offers companies trained employees in the areas of insurance, information technology, accounting, legal, engineering, science, healthcare, life sciences, creative services, hospitality, retail, general business, and light industrial work.
The Complaint alleges that the Company issued materially false and misleading statements to investors by failing to disclose that its co-employer, Tri-State Employment Services, Inc., had a material unpaid federal payroll tax liability, which would adversely impact the Company and that the Company was not in compliance with the Account Purchase Agreements with Wells Fargo as of November 30, 2014.
On September 29, 2014, the Company announced the abrupt resignation of Defendant Amato on September 28, 2014, who would be replaced by Defendant Holzer.
On February 3, 2015, the Company filed a Form 8-K with the SEC, which revealed that: (i) as of November 30, 2014, the Company was not in compliance with the Net Worth covenant under the Account Purchase Agreements; (ii) on January 27, 2015, the Company learned that TSE had a material unpaid federal payroll tax liability; (iii) on January 28, 2015, Wells Fargo indicated to the Company that it would need to reconsider funding the Company's operations through the Account Purchase Agreement; (iv) on February 2, 2015, TSE filed for bankruptcy.
On this news, shares of the Company fell $0.39 per share over the next two days, or 59%, from its previous closing price on February 2, 2015, to close at $0.27 per share on February 4, 2015.
On February 6, 2015, the Company filed a Form 8-K with the SEC during after-market hours revealing that the financial statements for the year ended January 3, 2014 and the quarters ended April 4, 2014, July 4, 2014 and October 3, 2014 can no longer be relied on due to TSE's material unpaid federal payroll tax liability.
On this news, shares of the Company fell $0.06 per share, or over 18%, from its previous closing price to close at $0.27 per share on February 9, 2015.
On February 10, 2015, the Company announced the abrupt resignation of Defendants Clarke, Holzer, and Melby – the members of the Audit Committee – effective February 5, 2015. In each of their resignation letters, Defendants Clarke, Holzer, and Melby indicated that they learned of TSE's unpaid federal payroll tax liability on January 29, 2015 and the Audit Committee sought to commence an investigation on the matter, but was denied funding by Wells Fargo, which had sole control of the Company's financing. They also stated that their resignation stemmed from their inability to obtain funding to conduct the necessary investigation and other concerns about the situation, including the related party relationships between the Company and TSE.
On this news, shares of the Company fell $0.04, per share or over 14%, from its previous closing price to close at $$0.23 per share on February 10, 2015.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, 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. See www.pomerantzlaw.com.