NEW YORK, Oct. 12, 2015 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that an action has been filed in the Court of Chancery of the State of Delaware against the directors and/or officers of Tile Shop Holdings, Inc. (“Tile Shop” or the “Company”) (NASDAQ:TTS). The action alleges that the officers and directors of Tile Shop breached their fiduciary duties of loyalty, good faith and candor that resulted substantial harm to the Company.
The Complaint further alleges that the directors and/or officers of the Company acted with conscious disregard of their fiduciary duties by: (i) causing the Company to be devoid of internal controls; (ii) approving false and misleading statements which were issued by the Company to investors; (iii) causing the Company to violate generally accepted accounting principles (“GAAP”) and SEC regulations and, in particular, failing to disclose that the Company’s financial reports were allegedly unreliable, and likely misstated, in large part because of material weaknesses in the Company’s internal controls over product purchases in China and conflicts of interest arising from the CEO’s family relationship with Tile Shop’s largest supplier, Beijing Pingxiu (“BP”); (iv) approving transactions that were for the primary benefit of certain Company insiders, including approximately $112 million of Company insider sales; and (v) permitting the Company’s primary product to contain illegal amounts of lead.
If you are an investor in Tile Shop securities and wish to discuss your rights, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.