Law Firm Goodkind Labaton Rudoff & Sucharow LLP Announces Class Action
Lawsuit Against Infotopia, Inc.
NEW YORK--(BUSINESS WIRE)--Aug. 23, 2001--Goodkind Labaton Rudoff &
Sucharow LLP (GLRS) announced today that it has filed a suit in the United
States District Court for the Northern District of Ohio against Infotopia,
Inc. and four members of the company's senior management for stock fraud.
The plaintiffs, twenty-six stockholders of Infotopia, are seeking a minimum
of $5 million in damages and have asserted a claim for punitive damages.
Named in the suit aside from Infotopia (OTCBB:IFTP) are Daniel Hoyng,
Infotopia's chief executive officer and chairman of the board, Ernest
Zavoral, the company's president and a director, Marek Lozowicki, an
officer and a director, and Clinton Smith, an attorney who is also a director.
Infotopia, located in Canfield, Ohio, is in the direct marketing business
and sells various products through televised infomercials. The products
include home exercise equipment (the "Total Tiger" and "Body by Jake Bun
and Thigh Rocker"), a line of herbal formulas (the "Hot Mommies System"),
and a kitchen device (the "Cooking Saddle").
The complaint alleges that the plaintiffs were induced through a series of
false and misleading statements made by the company's senior management
between June and September 2000 to exercise warrants to purchase Infotopia
stock. The stockholders exercised their warrants in mid-September by
surrendering promissory notes issued by Infotopia that provided for the
return of principal within 270 days together with 10% interest.
The stockholders claim that they relied on statements by Hoyng and other
officers and directors that the "Torso Tiger" sales "will continue for many
years to come" and that earnings of 20 cents per share could be "safely
projected" "for this fiscal year." In fact, according to the complaint,
Infotopia discontinued the sale of this product as of December 31, 2000 and
the company reported a loss of over $16 million dollars for the three
months ending November 30, 2000 and a loss of over $26 million for the ten
months ended December 31, 2000. Other false and misleading statements
alleged in the complaint relate to an announced Letter of Agreement for a
$20 million financing package that was characterized in an August 4, 2000
press release as a "real home run for our company." In a letter to the
shareholders on September 28, 2000 Hoyng disclosed that the Letter of
Agreement was in fact only a letter of intent that never materialized into
any financing for Infotopia.
The stockholders further assert that the false and misleading statements
had the effect of causing the stock price to rise from 12 cents per share
on August 23, 2000 to $1.12 per share on September 12, 2000. Several of the
insiders sold hundreds of thousands of shares through September 20
realizing substantial profits. The suing stockholders' stock was not
registered by the company until over a month later when the stock price had
dropped to the 20 cent per share range. Adjusted for a recent 200:1 reverse
split, the stock is currently trading at less than a half a cent per share.
The plaintiffs are represented by Mark S. Arisohn, Esq. of the New York law
firm, Goodkind Labaton Rudoff & Sucharow LLP, a national leader in
securities fraud litigation. For almost 40 years, GLRS has practiced at the
trial and appellate levels in the federal and state courts For a copy of
the complaint, please go to the GLRS web site, www.glrs.com. For additional
information or comments, please contact Mr. Arisohn. at 212-907-0840.
www.glrs.com
CONTACT: Goodkind Labaton Rudoff & Sucharow LLP, New York
Mark S. Arisohn, Esq.
212/907-0840
arisohm@glrs.com
or
Media Contact:
Jeanine Magsitza, 212/907-0659
magsitj@glrs.com
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