BALA CYNWYD, Pa., Feb. 1 2005 – LAWFUEL – The Law News Network – The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United
States District Court for the Southern District of Ohio on behalf of all
securities purchasers of the Huffy Corporation, formerly (NYSE: HUF),
(OTC: HUFCQ) (“Huffy” or the “Company”) between April 16, 2002 and August 13,
2004, inclusive (the “Class Period”).
If you wish to discuss this action or have any questions concerning this
notice or your rights or interests with respect to these matters, please
contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Darren J. Check,
Esq.) toll-free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at
info@sbclasslaw.com.
The complaint charges certain officers and directors of Huffy including
Don R. Graber, Timothy G. Howard, Robert W. Lafferty and Paul R. D’Aloia with
violations of the Securities Exchange Act of 1934. More specifically, the
Complaint alleges that the Company failed to disclose and misrepresented the
following material adverse facts which were known to defendants or recklessly
disregarded by them: (1) that the Company failed to effectively integrate the
McCalla and Gen-X acquisitions; (2) that the Company overstated its financial
results minimally by $3.5 to $5.0 million, because its Canadian operations
were engaged in improper accounting practices; (3) the improper accounting
practices in the Company’s Canadian operations stemmed from improper customer
deductions, credits and reserves for inventory valuation and doubtful accounts
receivables; (4) that the Company had to record both a write-off of certain
intangible assets and a full valuation allowance for deferred tax assets,
estimated at $53.0 million; (5) that Company’s financial problems were
mounting, forcing Huffy to eventually file for bankruptcy; (6) and that as a
consequence of the foregoing, defendants lacked a reasonable basis for their
positive statements about the Company’s growth and prospects.
On August 13, 2004, the Company stated that in the course of its review of
the Corporation’s financial statements for the first quarter of 2004, it
determined that certain accounting entries, estimated in the range of $3.5 to
$5.0 million related primarily to customer deductions, credits and reserves
for inventory valuation and doubtful account receivables for Huffy Sports
Canada (formerly known as Gen-X Sports) would more properly be reflected in
the period ended December 31, 2003 rather than in the first quarter of 2004.
On this news, shares of Huffy fell $0.23 per share, or 40 percent, on August
16, 2004, to close at $0.35 per share.
On August 16, 2004, the Company confirmed that the NYSE had determined
that trading of Huffy common stock should be suspended immediately and that
the NYSE would take steps to remove Huffy as a listed company on the NYSE.
Then, on October 20, 2004, the Company announced that the Company and all of
its United States and Canadian subsidiaries had filed voluntary petitions for
protection under Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Southern District of Ohio.
Plaintiff seeks to recover damages on behalf of class members and is
represented by the law firm of Schiffrin & Barroway, which prosecutes class
actions in both state and federal courts throughout the country. Schiffrin &
Barroway is a driving force behind corporate governance reform, and has
recovered in excess of a billion dollars on behalf of institutional and high
net worth individual investors. For more information about Schiffrin &
Barroway, or to sign up to participate in this action online, please visit
http://www.sbclasslaw.com.
If you are a member of the class described above, you may, not later than
March 25, 2005 move the Court to serve as lead plaintiff of the class, if you
so choose. A lead plaintiff is a representative party that acts on behalf of
other class members in directing the litigation. In order to be appointed
lead plaintiff, the Court must determine that the class member’s claim is
typical of the claims of other class members, and that the class member will
adequately represent the class. Under certain circumstances, one or more
class members may together serve as “lead plaintiff.” Your ability to share
in any recovery is not, however, affected by the decision whether or not to
serve as a lead plaintiff. You may retain Schiffrin & Barroway, or other
counsel of your choice, to serve as your counsel in this action.
