NEW YORK (May 20)—A New York law firm has filed a class action lawsuit against Collins & Aikman Corp. and several of its executive officers and directors, charging they issued a series of material misrepresentations to the market between August 2001 and August 2002, thereby artificially inflating the company's stock price. The suit is seeking unspecified monetary damages. The case, filed in the U.S. District Court for the Eastern District of Michigan, included in its list of defendants: Collins & Aikman, its largest shareholder Heartland Industrial Partners L.P. and several board member designees from Heartland, former CEO Thomas E. Evans, current CEO and President Jerry Mosingo and others. The suit contends the defendants repeatedly stated that the company would be able to ride out the market shake-up, that following acquisitions it would not only have increased sales but also be more cost efficient and profitable and that the acquisition of Textron Automotive Co.'s Trim Division would be accretive and help to increase operating income by reducing costs through synergies and economies of scale. When Collins & Aikman reported a second-quarter loss of $20.3 million in 2002, the company's stock price plummeted 49 percent to close at $2.81 after reaching a high of $11.35 per share on May 15 of last year.
Class action suit against Collins & Aikman filed
Rubber News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].