News
Navarre Sued In Relation to Funimation Acquisition
posted on by Christopher Macdonald
Navarre Directors and Executive Officers Accused of Using The Announcement Regarding the Purchase of Funimation as Part of A Scheme to Fraudulently Increase the Value of Navarre Shares.
Lerach Coughlin Stoia Geller Rudman & Robbins LLP, a 150-lawyer nation-wide law firm, has filed an investor class action lawsuit against Navarre Corporation in relation to Navarre's purchase of Funimation.
Lerach Coughlin alleges several of Navarre's senior executive officers and directors used the announcement regarding the purchase of Funimation, combined with "materially false and misleading statements" regarding Navarre's financial status, to temporarily increase Navarre's stock value to a period high of $18.77. The defendants then sold $13.8 million worth of shares.
Shortly later Navarre withdrew the statement regarding the purchase of Funimation. According to the complaint, the sudden withdrawal of the statement caused rumors that Navarre's accounting was "problematic." Stock prices then dropped to below $7.
Because the defendants were privy to not-publicly-available information that indicated the true value of the stocks, Lerach Coughlin states that proceeds are from insider trading. Because the defendants disseminated false information and benefited from it, Lerach Coughlin categorizes the acts as fraud.
The complaint states, "Defendants were further motivated to engage in this course of conduct in order to: (i) use 1.3 million shares as currency for it Funimation acquisition; (ii) obtain a new credit facility on more favorable terms that it would have had the truth about its accounting been known; and (iii) enable Individual Defendants to sell over 994,362 million* shares of their personally held Navarre stock and thereby reap $13,799.671 million in gross proceeds."
No executives, directors or staff of Funimation were named as defendants or accomplices in the complaint.
Lerach Coughlin seeks to recover damages on behalf of all those that purchased of Navarre common stock between January 21, 2004 and February 22, 2005.
The full press release can be read here.
The full 29-page complaint can be read here.
Investors can join the lawsuit here.
* this is an error in the complaint, it is stated elsewhere that the Individual Defendants sold 994,362 shares, not 994,362,000,000 shares.
Thanks to Jack Daniels and Kojak for this information.
Addendum: On July 12, Navarre CFO and Director James G. Gilbertson resigned from the company. Gilbertson is one of the Individual Defendants named in the complaint.
Lerach Coughlin is only one of no less than 13 lawfirms that filed class-actions lawsuits against Navarre in June.
Lerach Coughlin alleges several of Navarre's senior executive officers and directors used the announcement regarding the purchase of Funimation, combined with "materially false and misleading statements" regarding Navarre's financial status, to temporarily increase Navarre's stock value to a period high of $18.77. The defendants then sold $13.8 million worth of shares.
Shortly later Navarre withdrew the statement regarding the purchase of Funimation. According to the complaint, the sudden withdrawal of the statement caused rumors that Navarre's accounting was "problematic." Stock prices then dropped to below $7.
Because the defendants were privy to not-publicly-available information that indicated the true value of the stocks, Lerach Coughlin states that proceeds are from insider trading. Because the defendants disseminated false information and benefited from it, Lerach Coughlin categorizes the acts as fraud.
The complaint states, "Defendants were further motivated to engage in this course of conduct in order to: (i) use 1.3 million shares as currency for it Funimation acquisition; (ii) obtain a new credit facility on more favorable terms that it would have had the truth about its accounting been known; and (iii) enable Individual Defendants to sell over 994,362 million* shares of their personally held Navarre stock and thereby reap $13,799.671 million in gross proceeds."
No executives, directors or staff of Funimation were named as defendants or accomplices in the complaint.
Lerach Coughlin seeks to recover damages on behalf of all those that purchased of Navarre common stock between January 21, 2004 and February 22, 2005.
The full press release can be read here.
The full 29-page complaint can be read here.
Investors can join the lawsuit here.
* this is an error in the complaint, it is stated elsewhere that the Individual Defendants sold 994,362 shares, not 994,362,000,000 shares.
Thanks to Jack Daniels and Kojak for this information.
Addendum: On July 12, Navarre CFO and Director James G. Gilbertson resigned from the company. Gilbertson is one of the Individual Defendants named in the complaint.
Lerach Coughlin is only one of no less than 13 lawfirms that filed class-actions lawsuits against Navarre in June.
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