NEW YORK- LAWFUEL – The Law News Network – Nov. 23, 2005–The law firm of Milberg Weiss Bershad & Schulman LLP announces that a class action lawsuit was filed on November 21, 2005 on behalf of all persons and entities who purchased the common stock of Great Wolf Resorts, Inc. (“Great Wolf” or the “Company”) (Nasdaq: WOLF) pursuant or traceable to the Company’s Initial Public Offering (“IPO”) of common stock on December 14, 2004, and on behalf of all persons and entities who purchased or otherwise acquired Great Wolf securities between December 14, 2004 and July 28, 2005, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss’s website at: http://www.milbergweiss.com
If you purchased Great Wolf common stock pursuant or traceable to the Company’s IPO, or purchased or otherwise acquired Great Wolf securities between December 14, 2004 and July 28, 2005, inclusive, and sustained damages, you may, no later than January 23, 2006, request that the Court appoint you as lead plaintiff. 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 Milberg Weiss Bershad & Schulman LLP, or other counsel of your choice, to serve as your counsel in this action.
The action, case no. 05-C-0687-C, is pending before the Honorable Barbara B. Crabb in the United States District Court for the Western District of Wisconsin against defendants Great Wolf, and certain of the Company’s officers and directors. According to the complaint, defendants violated sections 11, 12(a)(2), and 15 of the Securities Act, and sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period.
The complaint alleges that Great Wolf is an owner, operator and developer of family resorts in the United States that feature indoor waterparks and other family-oriented entertainment activities. According to the Complaint, the Company filed a registration statement and prospectus with the SEC in connection with the Company’s IPO that contained materially false and misleading statements about Great Wolf’s financial condition and business prospects. Moreover, during the Class Period, the Company reported strong results and issued positive guidance in press releases and SEC filings that defendants knew, or recklessly disregarded, were materially false and misleading. Unbeknownst to investors, during the Class Period, the Company was suffering from a host of adverse conditions resulting from, in part, its failure to implement an adequate system of internal controls to, among other things, properly account for the Company’s revenue and operating expenses. Defendants were motivated to conceal these material problems to complete the Company’s IPO and to file a registration statement with the SEC that enabled Company insiders, including certain defendants, to sell their personally-held shares of Great Wolf stock to the public.
On July 28, 2005, the last day of the Class Period, the Company issued a press release announcing disappointing second quarter 2005 adjusted Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) of $3.3 million, significantly lower than defendants’ previously issued guidance of $7.0 million. The Company attributed the results to various factors, including “a slower than expected start to the summer season in the Midwest; competitive pressures at its Sandusky, Ohio resort; and a slower-than-expected occupancy ramp up at the company’s Sheboygan, Wis. property.” In addition, defendant John Emery, CEO and a director of Great Wolf, stated that certain “internal factors” negatively impacted the Company’s second quarter results, including “the timing and flow of operational information to provide accurate forecasts and the lack of visibility of our customer booking patterns.” The Company lowered its guidance for the third and fourth quarter of 2005, and the full year 2005. For full year 2005, the Company reduced its guidance to adjusted EBITDA of $34 million to $40 million, from its previous guidance of $47 million to $50 million. In reaction to this news, the price of Great Wolf common stock fell $6.12 per share, or nearly 31%, from its closing price of $19.77 on July 27, 2005, to close at $13.65 on July 28, 2005.
Milberg Weiss Bershad & Schulman LLP (http://www.milbergweiss.com) is a firm with over 100 lawyers with offices in New York City, Los Angeles, Boca Raton, Delaware, and Washington D.C. and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others for nearly 40 years. Please contact the Milberg Weiss website for more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:
Steven G. Schulman
Peter E. Seidman
Andrei V. Rado
One Pennsylvania Plaza, 49th fl.
New York, NY 10119-0165
Phone number: (800) 320-5081
Email: sfeerick@milbergweiss.com
