PHILADELPHIA, Aug. 9 LAWFUEL – The Law News Network — Barrack, Rodos & Bacine today issued the following:
A class action has been commenced in the United States District Court for
the District of Connecticut on behalf of purchasers of the publicly traded
securities of Host America Corp. (Nasdaq: CAFE) (“Host America” or the
“Company”) between July 12, 2005 to July 22, 2005, inclusive (the “Class
Period”).
The complaint charges Host America and certain of its officers and
directors with violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint
alleges that the defendants issued a press release on July 12, 2005, stating
that the Company was starting to survey ten Wal-Mart stores in the southwest,
in preparation for installation of its LightMasterPlus on the fluorescent
lighting system of each store and quoting Host America’s CEO, Geoffrey Ramsey,
as saying “This is a major event for our company, which we have been working
towards since last year. We expect this prestigious customer will like the
savings they receive from this first-phase roll-out and believe that the next
phase will involve a significant number of stores.”
On July 19, the Company announced that it had been “contacted informally”
by a regional office of the SEC requesting documents and information relating
to its July 12 press release “and into related developments in the trading of
Host securities.” After the close of trading on July 22, the Company
disclosed that it was informed that the SEC had commenced a formal
investigation of Host America, certain of its officers, directors and others
in connection with the July 12 press release. On the same day, the SEC
temporarily suspended trading in its stock over concerns that the statement
about a deal with Wal-Mart stores may have been misleading. The NASDAQ stock
market has since informed the Company that its shares may be delisted.
According to the complaint, the statements in the Company’s July 12, 2005
press release were false and misleading because they misrepresented the nature
of the Wal-Mart transaction as one whereby the Company had a firm commitment
by Wal-Mart to purchase Host America’s LightMasterPlus for installation in
Wal-Mart stores. The complaint alleges that Wal-Mart was not a customer of
the Company in connection with purchasing LightMasterPlus, that the Wal-Mart
transaction was limited to a test installation unrelated to any commitment by
Wal-Mart to install the LightMasterPlus in any of its facilities on a
permanent basis, and that Wal-Mart had made no commitment to purchase or
install the LightMasterPlus outside of the test installation. As a result,
the complaint alleges, defendants had no basis for stating that the test
installation was a “first-phase roll-out,” that “the next phase will involve a
significant number of stores,” or that the Wal-Mart test installation was a
“major event” for Host America.
News reports on July 22 noted that during the period after the July 12
announcement, three major shareholders of the Company had cashed in shares of
Host America’s stock, with one selling off 94% of his stake for a total of
more than $6 million and another selling about two-thirds of his shares.
The complaint seeks to recover damages on behalf of all persons who
purchased Host America securities during the Class Period. Barrack, Rodos &
Bacine has extensive experience in prosecuting investor class actions
involving financial fraud. Barrack, Rodos & Bacine has prosecuted securities,
antitrust and consumer class actions for more than 25 years. The firm has
offices in Philadelphia, San Diego, New York and New Jersey and has been
designated lead counsel by federal and state courts across the country in
large, complex cases. For more information about Barrack, Rodos & Bacine,
please visit their website at http://www.barrack.com.
If you are a member of the Class described above, you may, no later than
October 7, 2005, move the Court to serve as lead plaintiff of the Class, if
you so choose. In order to serve as lead plaintiff, however, you must meet
certain legal requirements. If you wish to discuss this action or have any
questions concerning this case or your rights or interests, please contact
Leslie Bornstein Molder, Esquire, Barrack, Rodos & Bacine, 3300 Two Commerce
Square, 2001 Market Street, Philadelphia, PA 19103, lmolder@barrack.com,
215-963-0600, fax number 215-963-0838.
