NEW YORK, May 8, 2003 (PRIMEZONE) -- The Law Firm of Wechsler Harwood LLP announced that on May 1, 2003, it filed a class action lawsuit in the United States District Court for the Eastern District of New York, on behalf of purchasers of Allou Health & Beauty Care, Inc. (Amex:ALU) ("Allou" or the "Company") publicly traded securities during the period between July 3, 2002 and April 9, 2003, inclusive (the "Class Period"). The Complaint names as defendants certain officers and directors of Allou and its auditors, KPMG LLP. A copy of the complaint filed in this action is available from the Court located at 225 Cadman Plaza East, Brooklyn, New York 11201.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between July 3, 2002 and April 9, 2003, thereby artificially inflating the price of Allou securities. Those materially false and misleading statements concerning the Company's financial results include allegations: (a) that Allou was materially overstating its accounts receivables by approximately $80 million and its inventory by approximately $35 million, thereby overstating Allou's revenue and earnings; and (b) as a result of the foregoing, Allou's financial statements were not prepared in accordance with GAAP and were therefore materially false and misleading.
On April 9, 2003, Allou announced that "its lenders have filed an involuntary petition for bankruptcy in the Eastern District of New York under the provisions of chapter 11, title 11, of the United States Code." Following this news, on April 9, 2003, the American Stock Exchange suspended trading in Allou's common stock. On April 24, 2003, Allou announced that it "believes that the levels of assets collateralizing loans were substantially overstated in recent reports submitted by the Company to its senior lenders. The preliminary results of the Company's investigation indicate that inventory was overstated by approximately $35,000,000 and that accounts receivable may be overstated by $75,000,000 to $80,000,000, for a total overstatement of $110,000,000 to $115,000,000. The Company has retained a forensic accounting firm to assist with the continuing investigation of this matter."
If you bought Allou publicly traded securities between July 3, 2002 and April 9, 2003, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than June 30, 2003. Any member of the purported class may move the Court to serve as lead plaintiff through Wechsler Harwood or other counsel of their choice, or may choose to do nothing and remain an absent class member.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. 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:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Telephone: (212) 935-7400 Toll Free Telephone: (877) 935-7400 David Leifer, Wechsler Harwood Shareholder Relations Department: dleifer@whesq.com extension-251.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca