Tuesday September 2 11:10 AM EDT
Company Press Release
Shareholder Files Class Action Against Einstein Noah Bagel Corp., Alleging Violation of the Securities Laws
PHILADELPHIA--(BUSINESS WIRE)--Sept. 2, 1997--Berger & Montague, P.C., and Bader, Villanueva & Feder, P.C., commenced a class action on Aug. 28, 1997 in the United States District Court for the District of Colorado pursuant to federal securities laws on behalf of purchasers of Einstein Noah Bagel Corp. (Nasdaq:ENBX) (``Einstein'') common stock during the Aug. 2, 1996 through July 15, 1997 time period (the ``Class Period'').
Einstein operates and franchises retail food service stores, primarily under the name ``Einstein Bros. Bagels'' and ``Noah's New York Bagels,'' which specialize in bagels, cream cheese spreads and sandwiches.
The Complaint alleges that Einstein and certain of its officers and directors violated the federal securities laws by issuing false and misleading statements and omitting material facts regarding the company's financial results throughout the Class Period.
The Complaint alleges that defendants artificially inflated Einstein's earnings and inflated the value of its stock by:
-- concealing the huge losses suffered by and the poor
financial health of its Financed Area Developers (``FADs''),
11 separate entities that owned the bulk of the bagel stores
and were financed by Einstein;
-- failing to consolidate the FADs' financial results with
those of Einstein, as the company was required to do under
Generally Accepted Accounting Principles (``GAAP'');
-- listing the loans it provided to the FADs as an asset on
Einstein's balance sheet despite grave uncertainty regarding
the FADs' ability to repay the loans, failing to establish a
loss reserve for these loans, and failing to disclose the
financial results of the individual FADs;
-- failing to provide material facts concerning related party
transactions, and instead providing only skeletal, and
aggregated, financial information on the FADs;
The Complaint further alleges that, as a result of the defendants' violations, the market price of Einstein stock during the Class Period was as high as $36.40, and tumbled to $11.25 by the end of the Class Period.
Plaintiff seeks to recover the damages suffered by the class members and is represented by the law firms of Berger & Montague, P.C., and Bader, Villaneuva & Feder, P.C.
Berger & Montague, P.C., has recovered over 1 billion dollars for shareholders over the last 24 years, and has been widely recognized by Courts for the high quality of their representation of defrauded investors, as well as for their expertise in complex antitrust, environmental and consumer protection cases.
This early notice to class members is being made pursuant to applicable law. If you are a member of the class described above, you may move the court to serve as lead plaintiff of the class within 60 days from July 25, 1997.
If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may call or write to:
Sherrie R. Savett, Esq. or Jill E. Sterbakov, Esq.
Berger & Montague, P.C.
1622 Locust St.
Philadelphia, PA 19103
888/891-2289 or 215/875-3000
Fax: 215/875-5715
E-mail: InvestorProtect@bm.net |
