By: Moderatore on Lunedì 13 Giugno 2005 19:59
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Lockridge Grindal Nauen P.L.L.P. Announces Shareholder Class
Action Lawsuit Against OCA, Inc. -- OCA
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MINNEAPOLIS, June 13, 2005 (PRIMEZONE) -- The law firm of Lockridge
Grindal Nauen, P.L.L.P. announces that it filed a class action lawsuit
Friday, June 10 in the United States District Court for the Eastern
District of Louisiana on behalf of all purchasers of the common stock
of Orthodontic Centers of America, Inc. ("OCA" or the "Company")
(NYSE:OCA) from November 14, 2002 through March 18, 2003, inclusive
(the "Class Period").
The complaint charges OCA and certain of its officers and directors
with violations of the Securities and Exchange Act of 1934. More
specifically, the complaint alleges that on May 17, 2001, OCA and
OrthAlliance, Inc. ("OrthAlliance") announced that the parties had
entered into a definitive merger agreement, whereby a wholly owned
subsidiary of OCA would merge into OrthAlliance in a stock-for-stock
transaction, with OrthAlliance becoming a wholly owned subsidiary of
OCA. Following the May 17, 2001, announcement, a number of
OrthAlliance's affiliated practices filed lawsuits against OrthAlliance
and/or notified OrthAlliance that it was in default under their
service, management service, and consulting agreements, in response to
which OrthAlliance engaged outside counsel to represent its interests.
The complaint also alleges that after the announcement of the completed
merger on November 9, 2001, OCA set forth an integration plan with
respect to OrthAlliance affiliated practices. The integration plan,
however, was not proceeding "very, very well" as articulated by
defendants. In fact, several other OrthAlliance affiliated practices,
in addition to the practices that filed lawsuits, discontinued paying
their services fees under their service, management service, and
consulting agreements; while at the same time, OCA continued to
recognize revenue it allegedly received from such fees.
The complaint further alleges that the statements disseminated by
defendants during the Class Period and with respect to the financial
well-being of the Company were each materially false and misleading
because OCA failed to disclose and indicate that the integration of
OrthAlliance practices was not proceeding as had indicated by the
defendants, which, in turn, caused the Company to experience less
profit generation because (1) not only had some OrthAlliance practices
sued but other OrthAlliance practices had discontinued paying their
services fees; (2) because the Company continued to recognize revenue
from the services from OrthAlliance practices that were in litigation
and from those that had stopped paying their service fees; (3) because
the defendants mischaracterized that only "some doctors" had stopped
paying their service fees, which only created "a little noise" for the
Company when in fact the magnitude of the problem, which OCA was
required to report, was greater than reported; (4) because the Company
was recognizing revenue in violation of the Generally Accepted
Accounting Principles ("GAAP"); and (5) because the defendants were
actively concealing these facts in order to manipulate the Company's
earnings outlooks in order to maintain its favorable stock prices. The
complaint additionally alleges that following the close of the markets
on March 18, 2003, OCA issued a press release announcing its year-end
earnings for 2002 wherein the Company reported that earnings and fee
revenue were down from the previous year. The decline in fee revenue
resulted from numerous OrthAlliance affiliated practices that
discontinued paying fees required under their service, management
service, and consulting agreements in 2002.
Market reaction to these revelations was swift. Immediately following
the announcement on March 19, 2003, shares of the Company fell $3.93,
or 41 percent, to close at $5.64, from a closing price of $9.57 per
share on March 18, 2003.
Plaintiff seeks to recover damages on behalf of class members and is
represented by the law firm of Lockridge Grindal Nauen P.L.L.P. The
firm has considerable experience in prosecuting securities class
actions, has extensive experience representing shareholders in class
actions, and has successfully recovered millions of dollars for
defrauded investors and shareholders. The reputation and expertise of
the firm in shareholder and other class action litigation have been
repeatedly recognized by courts, which have appointed the firm to major
positions in complex multi-district and consolidated litigations.
Lockridge Grindal Nauen P.L.L.P. has offices in Minneapolis and
Washington, D.C.
If you are a member of the class described above, you may, not later
than June 23, 2003, move the Court to serve as lead plaintiff of the
class, if you so choose. In order to serve as lead plaintiff, however,
you must meet certain legal requirements.
If you have any questions about the lawsuit or how you may be able to
recover losses, please call or write:
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Gregg M. Fishbein, Esq. (gmfishbein@locklaw.com)
Robert J. Linsmier (rjlinsmier@locklaw.com)
Lockridge Grindal Nauen P.L.L.P.
100 Washington Avenue South, Suite 2200
Minneapolis, MN 55401
(612) 339-6900