CENTRAL ISLIP, N.Y., June 6, 2003 (PRIMEZONE) -- An investor sued the former top management and outside auditors of Allou Healthcare Inc. (AMEX:ALU) yesterday, accusing them of deceiving the public about the bankrupt company's financial condition, Berman DeValerio Pease Tabacco Burt & Pucillo announced.
The lawsuit was filed June 5 in the U.S. District Court for the Eastern District of New York. Plaintiffs seek damages for violations of federal securities laws on behalf of all investors who bought Allou common stock from June 22, 1998 through April 9, 2003 (the Class Period).
Berman DeValerio has represented investors in class actions for more than 20 years. To receive a copy of the complaint, you may contact the Court, call the firm at (800) 516-9926 or go to the firm's website at www.bermanesq.com.
The lawsuit claims that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by releasing false and misleading financial statements about Allou's revenue and earnings, causing the company's stock to reach an artificially high price. For years, Allou reported strong fiscal growth. The lawsuit claims that those reports were false and that Allou depended on loans to operate its business. To obtain financing, the defendants made material misstatements to the public throughout the Class Period, overstating Allou's inventory and accounts receivable, the lawsuit says.
Eventually, the complaint says, accountants engaged by Allou's lenders discovered the company had been inflating its financial results. On April 9, 2003, Allou announced that its lenders had filed an involuntary petition for Chapter 11 bankruptcy against the company. Allou consented to the petition shortly after it had been filed, according to the complaint. That same day, Allou also disclosed that its lenders had declared a default of its credit line.
As a result of these revelations, Allou's stock price plummeted nearly 26% on April 9 from its closing price the previous day, before the American Stock Exchange suspended trading in the stock. The last listed trading price of $1.07 represents a 91.92% drop from the Class Period high of $13.25, which occurred on April 21, 1999.
If you purchased Allou Healthcare Inc. stock during the period June 22, 1998 through April 9, 2003, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
Michael T. Matraia, Esq. Mark Booker, Esq. One Liberty Square Boston, MA 02109 (800) 516-9926 law@bermanesq.com C. Oliver Burt, III, Esq. 515 North Flagler Drive, Suite 1701 West Palm Beach, FL 33401 (561) 835-9400 lawfla@bermanesq.com
If you wish to apply to be lead plaintiff in this action, a motion must be filed on your behalf with the court no later than July 1, 2003. You may contact the attorneys at Berman DeValerio to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action. You may also retain counsel of your choice. To be a member of the class, however, you need not take any action at this time. Berman DeValerio Pease Tabacco Burt & Pucillo prosecutes class actions nationwide on behalf of institutions and individuals, chiefly victims of securities fraud, antitrust law violations, and consumer fraud. The firm consists of 34 attorneys in Boston, San Francisco, and West Palm Beach, Florida.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca