LawFuel.com – Class Action Legal News – The law firm of Wohl & Fruchter LLP announces that it has filed a class action lawsuit in the United States District Court for the Eastern District of Wisconsin on behalf of investors who purchased Assisted Living Concepts, Inc. (NYSE: ALC) Class A common stock during the period between March 12, 2011 and August 6, 2012 (the Class Period).
If you purchased ALC stock during the Class Period, and wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action, or have any questions concerning this notice or your rights, please contact plaintiff’s counsel, J. Elazar Fruchter, at 866.582.8140 or 845.425.4658, or via email at email@example.com. If you are a member of the Class, you can view a copy of the complaint, or join this class action online at: http://www.wohlfruchter.com/cases/alc. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges ALC and its former Chief Executive Officer with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements, and omitted material information concerning ALC’s compliance with its obligations under a lease covering eight assisted living facilities operated by ALC. Under the terms of the lease, ALC was obligated to maintain specified occupancy rates and insure all regulatory licenses remained in good standing. In its quarterly and annual SEC filings, ALC confirmed its compliance with these obligations.
Undisclosed to investors, however, there is substantial evidence that during the Class Period, ALC failed to maintain the specified occupancy rates and concealed this fact by treating units leased to employees as bona fide rentals. Also undisclosed to investors until revealed in a lawsuit filed by the landlord, state regulators in Georgia and Alabama served notices in February and March 2012 of their intent to revoke licenses for three of the facilities, further violating the lease.
In early May 2012, the audit committee of ALC’s board of directors launched an investigation after receiving an internal whistleblower complaint concerning “possible irregularities in connection with” the lease, and on June 21, 2012, ALC settled with the landlord, causing ALC to incur a net loss of $19.5 million for the first six months of 2012 – an amount close to ALC’s entire net income in 2011.
On August 7, 2012, ALC announced that it was the subject of an SEC investigation concerning a number of topics, including “compliance with occupancy covenants” under the lease and the “leasing of units for employee use.”
Upon this news, ALC shares fell over 26 percent to close at $7.89 per share on August 7, 2012, representing a loss of shareholder value of over $51 million.
The plaintiff is represented by Wohl & Fruchter LLP, an experienced securities litigation firm representing plaintiffs in class actions arising from fraud and other fiduciary breaches by corporate managers, as well as other complex litigation matters. Please visit our website, www.wohlfruchter.com, to learn more about our Firm.
This release may be deemed to constitute attorney advertising.
Like This Article in PDF?
Just enter your email below and we'll forward to your inbox immediately.