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It hasn't turned out out to be a "blockbuster" deal for
persons who acquired Blockbuster (NYSE:BBI) stock when
Viacom disposed of its Blockbuster shares, or for those
persons who acquired Blockbuster shares since that time.
Basically, it has been alleged that Blockbuster purchasers
were seriously misled about the true condition of the Company.
Perhaps the trouble for Blockbuster started when Viacom,
which was Blockbuster's controlling shareholder, forced
Blockbuster to take on $1.1 billion of debt. Specifically,
Viacom required Blockbuster, prior to the Exchange Offer,
to pay a $5 per share special dividend. Viacom, of course,
was the primary beneficiary of this special dividend.
Thus, Blockbuster was saddled with debt in a very
competitive market. But, in the Prospectus, when Viacom was
divesting itself of Blockbuster, Blockbuster's future was pictured
as very rosy.
As usual, though, things can be covered up for only so long.
Eventually, the true financial condition of Blockbuster would
have to be disclosed. On August 9, 2005, Blockbuster reported
a second-quarter net loss well below analyst estimates; a
negative free cash flow, and that it was abandoning its
2005 guidance. More bad news would soon follow which would
cause Blockbuster shares to further plummet. On August 8, 2005,
the Company announced that it had been forced to amend its
credit facility to provide for a waiver of its leverage ratio covenants.
Finally, on November 8, 2005, it was disclosed in SEC filings that
Blockbuster may not have sufficient cash flows from operating
activities, cash on hand and available borrowings under its credit
facilities to service its indebtedness.
Class action litigation has been brought on behalf of all persons
who acquired Blockbuster pursuant to the Company's exchange
offer of Viacom stock for 144 million common shares of Blockbuster
and on behalf of those who purchased Blockbuster between
September 8, 2004 and August 9, 2005.
If you are an affected investor in Blockbuser, or an affected investor
in Guidant, Motive, or First BankCorp (see below), you may wish
to contact us at info@securitiessleuth.com to discuss your options.
Cases Under Investigation
Guidant Corp. (NYSE: GDT)
On June 17, 2005, the FDA issued a
nationwide recall notification impacting Guidant's implantable
defibrillators and cardiac resynchronization therapy defibrillators.
On November 3, 2005, the Attorney General of the State of
New York filed a complaint, alleging "repeated and persistent
fraud" by the Company in connection with its defibrillator sales.
Investors who purchased GDT between December 15, 2004 and
November 3, 2005, are affected.
Motive, Inc. (Nasdaq: MOTV)
On October 27, 2005 the Company announced it would restate
its financial results for the quarters ended March 31, 2005, and
June 30, 2005, and the six-month period ended June 30, 2005.
Investors who purchased MOTV between April 21, 2005 and
June 30, 2005, are affected.
First BanCorp (NYSE: FBP)
First BanCorp shareholders recently have seen their stock tumble
as a result of a series of negative developments. First, the
Company announced that it had received a letter from the
SEC indicating that it was conducting an informal inquiry into
the Company. Second on September 30, 2005, the Company
announced that its President and CEO was stepping down and
its CFO had also resigned her position. Investors who purchased
between March 31, 2003 and October 25, 2005, are affected.
Pixar (NASDAQ: PIXR)
While the Company touted the DVD sales of its movie,
The Incredibles, its CFO together sold over $27 million in
Company stock. Subsequently, its stock dropped significantly
after the Company lowered its second quarter guidance and
again after it announced the commencement of an SEC
investigation. Investors who purchased Pixar between
January 18, 2005 and August 26, 2005, are affected.
Now with respect to settled cases. If you are an affected investor – you purchased any of these stocks during the relevant class period, you may wish to contact the claims administrator to obtain additional information. Remember, if you don’t submit your claim form, you won’t receive your proportionate share of recovery.
Metromedia Fiber Network, Inc. (MFNX)
Class Period: January 8, 2001 to July 2, 2001
Claims Deadline: January 27, 2006 Gilardi
Claims Administrator: Gilardi
Micromuse, Inc. (MUSE)
Class Period: January 18, 2001 to May 17, 2004
Claims Deadline: January 9, 2006
Claims Administrator: A.B. Data
Homestore.com Inc. (HOMS)
Class Period: January 1, 2000 to Decembr 21, 2001
Claims Deadline: December 12, 2005
Claims Administrator: Rust Consulting
Healthtronics Surgical Services (HRTN)
Class Period: January 4, 2000 to July 28, 2003
Claims Deadline: December 31, 2005
Claims Administrator: Garden City
Contact info: info@gardencitygroup.com or 800.327.3664
Caminus Corp. (CAMZ)
Class Period: February 12, 2002 to July 8, 2002
Claims Deadline: October 26, 2005
Claims Administrator: Garden City
Contact info: info@gardencitygroup.com or 800.327.3664
Canadian Superior Energy (SNG)
Class Period: November 1, 2003 to March 11, 2004
Claims Deadline: November 15, 2005
Claims Administrator: Gilardi
Comerica, Inc. (CMA)
Class Period: July 17, 2002 to October 1, 2002
Claims Deadline: November 23, 2005
Claims Administrator: Garden City
Contact info: info@gardencitygroup.com or 800.327.3664
Quality Distributions, Inc. (QLTY)
Class Period: November 6, 2003 to January 18, 2005
Claims Deadline: December 23, 2005
Claims Administrator: Garden City
Contact info: info@gardencitygroup.com or 800.327.3664
Again, if you are affected by a settled case, then you should
contact the claims administrator (rather than us). However,
if you are an affected investor in any of the companies under
investigation, you many wish to contact us so that you
can consider your options.
Likewise, if you happen to be aware of corporate restatements
or other financial fraud -- especially if you're a victim --
you're encouraged to contribute to the Sleuth by giving your
own tip-offs at www.securitiessleuth.com or by e-mailing
info@securitiessleuth.com. You can also call Mark McNair
at 877-511-4717. If you have a friend or colleague you
think would benefit from The Sleuth, please pass along
this issue and ask them to sign up at
www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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