BALA CYNWYD, Pa., Oct. 22 2004 LAWFUEL – Law, class action, litigation, attorney news — 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 District of Connecticut on behalf of all
securities purchasers of Star Gas Partners, L.P. (NYSE: SGU) (NYSE: SGH)
(“Star” and the “Partnership”) from April 30, 2003 through October 15, 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 Star, Irik P. Sevin, and Ami Trauber with violations
of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. More specifically, the complaint alleges that
the Partnership failed to disclose and misrepresented the following material
adverse facts which were known to defendants or recklessly disregarded by
them: (1) that the Partnership was unable to pass costs of rising heating oil
prices on to its customers because the Partnership had earlier acquired
heating oil at a much lower cost; (2) that as a result of this, defendants
were unable to increase or maintain profit margins in its heating oil segment;
(3) that the Partnership was experiencing massive customer attrition; and (4)
that the Partnership’s Petro heating oil division’s operational restructuring,
undertaken at the beginning of the Class Period, was a complete and utter
failure because of delays in the centralization of Star’s dispatch system.
On October 18, 2004, Star issued a press release with the headline: “STAR
GAS PARTNERS, L.P. ANNOUNCES SUSPENSION OF COMMON UNIT DISTRIBUTION.”
Therein, the Partnership stated that it had recently advised its Petro heating
oil division bank lenders of a substantial expected decline in earnings for
this division for the fiscal year that ended on September 30, 2004, and a
further projected decline in earnings for the fiscal year ending September 30,
2005, which would not permit Petro to meet the borrowing conditions under its
working capital line. According to Star, the source of the problem was a
combination of (a) the inability to pass on the full impact of record heating
oil prices to customers, and (b) the effects of unusually high customer
attrition principally related to its operational restructuring undertaken in
the past 18 months. Petro was continuing to submit borrowing requests under
its working capital line. Star was in discussions with the lenders to modify
conditions and other terms necessary to assure that Petro would have
sufficient liquidity to operate through the winter. Star anticipated that
because of the requirements of Star’s current and potential lenders, it would
not be permitted to make any distributions on its Common Units. Star believed
that with the support of its existing lenders, which cannot yet be assured, it
could manage the extraordinary challenges arising from current energy prices
and other factors. However, without that support, Star may be forced to seek
interim financing on extremely disadvantageous terms or even to seek to
restructure its debts under the protection of the bankruptcy courts.
News of this shocked the market. Shares of Star fell $17.28 per share, or
80 percent, to close at $4.32 per share on unusually high trading volume on
October 18, 2004.
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
December 20, 2004 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.
CONTACT: Schiffrin & Barroway, LLP
Marc A. Topaz, Esq.
Darren J. Check, Esq.
Three Bala Plaza East, Suite 400
Bala Cynwyd, PA 19004
1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at info@sbclasslaw.com
SOURCE Schiffrin & Barroway, LLP
Web Site: http://www.sbclasslaw.com
