Headline: Schubert & Reed LLP: Securities Class Action Filed Against Caribbean
Cigar Company
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SAN FRANCISCO, Dec. 16 /PRNewswire/ -- Notice is hereby given that on
December 15, 1997, a class action lawsuit was filed in the United States
District Court for the Southern District of Florida on behalf of a class ("the
Class") consisting of all persons who purchased the common stock of Caribbean
Cigar Company ("Caribbean") (NASDAQ:CIGR) or Caribbean's common stock
purchase warrants (NASDAQ:CIGRW) during the period August 14, 1997 through
November 14, 1997, inclusive ("the Class Period").
The complaint charges Caribbean and certain of its officers and directors
with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of
1934. The complaint alleges that during the Class Period, defendants
misrepresented the truth about Caribbean, its finances, revenues, gross
margins and future business prospects. In particular, defendants
misrepresented Caribbean's financial results and operations for its 1997 first
quarter ended June 30, 1997. The complaint alleges that as a result of these
misrepresentations, the Company's securities traded at inflated prices on the
Nasdaq Small Cap Market System and the Boston Stock Exchange.
The true facts first came to light on November 14, 1997 when defendants
issued a press release acknowledging that Caribbean's financial statements for
the first quarter would be restated, and that Caribbean now expected to report
a loss of about $800,000 for the quarter as compared with originally reported
net income of $131,265 or $0.03 cents a share. Defendants attributed the
restatement to (a) additional accruals for lease terminations and write-off of
leasehold improvements; (b) additional professional service fees; (c)
additional advertising expenses; (d) a write-down in inventory; (e) a
write-down of certain accounts receivable; (f) an increase in depreciation
expense; and (g) an increase in selling expenses. Defendants further stated
that they anticipated Caribbean would lose approximately $1.5 million in the
second quarter, due primarily to weaker than anticipated sales and gross
margins, with no corresponding reduction in expenses. As a result of these
disclosures, the trading prices of Caribbean common stock and warrants
declined substantially.
Plaintiff seeks to recover damages on behalf of all class members. He is
represented by the law firms of Schubert & Reed LLP, San Francisco,
California, James F. Humphreys & Associates, L.C., Washington, D.C. and Burt &
Pucillo, West Palm Beach, Florida, which have significant experience and
expertise prosecuting class actions on behalf of investors and shareholders.
If you are a member of the Class you may, not later than February 2, 1998,
move the court to serve as lead plaintiff for the Class. If you have any
questions concerning this notice or your rights, contact one of the contacts
below.
SOURCE Schubert & Reed LLP
-0- 12/16/97
/CONTACT: Robert C. Schubert or Willem F. Jonckheer of Schubert & Reed
LLP, 415-788-4220, or rcslaw@msn.com; or Mark McNair of James F. Humphreys &
Associates, L.C., 202-736-2191, or wmmcnair@aol.com; or Michael J. Pucillo of
Burt & Pucillo, 561-835-9400, or 800-349-4612, or cbmp@flinet.com/ |
