CASES
AgFeed Industries, Inc.
Class Period: Mar 16, 2009 to Aug 2, 2011
Lead Plaintiff Deadline: Dec 19, 2011 + Deadline passed
Summary of Case:
A securities class action has been filed against AgFeed Industries, Inc. ("AgFeed" or the "Company") on behalf of all persons who purchased or otherwise acquired AgFeed Industries, Inc. ("AgFeed" or the "Company") securities. between March 16, 2009 to August 02, 2011. This case has been filed in the USDC - Tennessee (Middle).
The complaint alleges that beginning on March 16, 2009, the Company, along with certain officers and directors at AgFeed, issued a series of materially false and misleading statements to investors about its financial health that were designed to deceive the market and cause shares of AgFeed to trade at artificially high prices.
In particular, the complaint alleges that officials at the Company failed to disclose to investors material adverse facts that: (1) AgFeed's collection efforts and credit dealings with its animal nutrition customers were not working because the "formula based analysis" the Company relied on in determining accounts receivable and reserves for doubtful accounts was flawed; (2) allowances for doubtful accounts were wildly undervalued; (3) accounts were overvalued and bad debts were undervalued, causing reported asset values to be overstated and expenses to be understated; and (4) AgFeed exaggerated its market edge as the combination of overstated assets and understated expenses resulted in creating an illusion of heightened profitability and failed to provide a "long-term picture" of the Company's value.
On August 2, 2011, the Company announced preliminary financial results for the second quarter of 2011 that showed that the Company was performing well below expectations and that AgFeed expected to post a loss of $17 million, as it added $5 million in allowances for its bad debt expenses. Additionally, on August 9, 2011, AgFeed disclosed to the U.S. Securities and Exchange Commission the true nature of its finances and the Company's decision to withdraw the Registration Statement for its animal nutrition business. Since these revelations have emerged, shares of AgFeed have lost over 72% of their value.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.