NexCen faces class action suit
By Staff -- Home Textiles Today, 7/7/2008 1:57:00 PM
Washington – Alleging “false and misleading” statements by NexCen Brands executives, a law firm based here has filed a class action complaint in the U.S. District Court for the Southern District of New York on behalf of purchasers of NexCen common stock.
The complaint, filed by Cohen, Milstein, Hausfeld & Toll, specifically cites “the omission of critical information regarding the existence of an accelerated-redemption feature in the loan the company used to finance its acquisition of the Great American Cookie Company, which resulted in a lack of liquidity so extreme as to cause questions about the company’s ability to continue to operate.”
As defendants, the complaint names NexCen; its former chairman David S. Oros; president and ceo Robert W. D’Loren; and former cfo David B. Meister. It alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, claiming that “statements made during the class period by NexCen and its executives were materially false and misleading…”
The law firm said that when NexCen released information on the accelerated-redemption clause on May 19, its shares fell by more than 77%. Purchasers of the stock from May 10-19, 2008 are qualified to join in the suit, the firm said.
