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Stanford University Law School - Securities Class Action Clearinghouse
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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IRENE L. WRIGHT, on behalf of herself :
and all others similarly situated,
:
Plaintiff,
:
-against- CLASS ACTION COMPLAINT
: 96 CIV. 2685
BT OFFICE PRODUCTS INTER- JURY TRIAL DEMANDED
NATIONAL, INC., RUDOLF A.J. :
HUYZER, JOHN J. McKIERNAN,
N.V. KONINKLIJKE KNP BT; and :
HOWARD L. BROWN,
:
Defendants.
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Plaintiff, by her attorneys, for her class action complaint
(the "Complaint"), alleges the following upon information and
belief (said information and belief being based, in part, upon the
investigation conducted by her attorneys, which included, inter
alia, analysis of public documents filed with the Securities and
Exchange Commission ("SEC"), published news reports, and press
releases as more fully detailed below), except as to those
paragraphs relating to the plaintiff, her purchase of BT Office
Products International, Inc. ("BT Office Products" or the
"Company") securities, and her suitability to serve as class
representative, which plaintiff alleges upon personal knowledge:
JURISDICTION AND VENUE
1. The jurisdiction of this Court is based upon Section 27
of the Exchange Act of 1934, as amended (the "Exchange Act"), 15
U.S.C. § 78aa; and 28 U.S.C. § 1331.
2. The claims asserted below arise under Sections 10(b) and
20(a) of the Exchange Act 15 U.S.C. §§ 78j(b) and 78t(a); and Rule
10b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10b-5.
3. Venue is proper in this District pursuant to 28 U.S.C.
§ 1391(b) and (d). BT Office Products maintains its Northeastern
operations in this District, the acts and transactions giving rise
to plaintiff's claims against defendants were committed in this
District the relevant documents and potential witnesses in this
action are located in this District, and the Company's stock is
traded on the New York Stock Exchange in this District.
4. In connection with the conduct complained of in this
Complaint, defendants directly or indirectly used the means and
instrumentalities of interstate commerce, including the mails,
telephonic communications and the facilities of national securities
exchanges.
NATURE OF THIS ACTION
5. This action is brought as a class action to remedy
violations of the Exchange Act by defendants on behalf of a class
of persons who purchased BT Office Products common stock between
January 30, 1996 (the date BT Office Products announced its 1995
full year and fourth quarter 1995 financial results), through March
28, 1996 (the date defendants revealed that BT Office Products'
previously announced 1995, as well as 1994 financial results, were
materially overstated), inclusive (the "Class Period") and were
damaged thereby (the "Class").
6. As detailed below, on or about July 19, 1995, BT Office
Products commenced an initial public offering through which it sold
10,000,000 shares at $11.50 per share for proceeds of over $110
million (the "IPO" or "Offering"). Throughout the prospectus which
was disseminated in connection with the Offering (the
"Prospectus"), the Company stressed that its acquisition strategy
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had been and was continuing to be successful in large measure
because of the Company's policy of retaining intact management of
the companies it acquired and allowing management to continue to
operate as it had previously. The Company further stressed that it
had successfully consolidated its newly acquired operations and
that it had sufficient controls in place to monitor such
consolidation. The Company also announced record financial results
in the Prospectus.
7. Between July 1995 and the beginning of January 1995, the
Company continued to announce new acquisitions, always stressing
its policy of retaining old management as key to the ultimate
success of those acquisitions. It also continued to announce
record financial results. Those announcements culminated on
January 30, 1996, when the Company announced record results for the
fourth quarter and year end. Thereafter, defendants announced
still more acquisitions and again stressed the autonomy of old
management in running the operations, its consolidation efforts to
date, and its controls to monitor such consolidation.
8. Despite those positive statements, the Company suddenly
revealed on March 28, 1996, that it would have to restate its 1994
and 1995 financial reports due to "accounting and financial
reporting irregularities in one of its U.S. operating divisions."
BT Office Products admitted that since at least February 1996, the
Company, including the individual defendants, had been conducting
an internal investigation into theft, overreporting of financial
results and inventory discrepancies at the Company's New York unit.
The problems were in fact so pervasive that BT Office Products'
Audit Committee engaged legal counsel and outside accountants to
conduct an investigation, and the Company suspended "key financial
management personnel." Nonetheless, the Company breathed not a
word of this investigation to the public until March 28, 1996. It
is now clear that defendants, contrary to the representations made
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in the Prospectus and thereafter, did not have sufficient controls
to monitor BT Office Products' acquisitions. Not once did
defendants, while repeatedly extolling the benefits of their
expansion program, warn investors of potential risks inherent in
allowing units of the Company to continue to operate essentially
without proper supervision as fiefdoms of prior management.
Defendants Huyzer and McKiernan, as Chief Executive Officer and
Chief Operating Financial Officer, respectively, of the Company,
did know or should have known of these risks. Moreover, defendant
Brown, who was in charge of the New York operations, had to know or
was reckless in not learning of the widespread financial
irregularities occurring right under his nose.
9. Once the truth was revealed BT Office Products stock lost
more than 25% of its value. Plaintiff and the Class suffered tens
of millions of dollars in damages.
THE PARTIES
10. During the Class Period, plaintiff and each member of the
Class purchased shares of BT Office Products common stock in the
open market without knowledge of the misconduct of defendants
alleged in this Complaint and suffered damages as a result.
Plaintiff and each member of the Class directly or indirectly
relied upon BT Office Products' public reports, press releases, and
other public statements, all as more fully described below, and/or
upon the integrity of the market for BT Office Products' common
stock. As a result, plaintiff and each member of the Class have
been damaged by defendants' illegal conduct.
11. Plaintiff Irene L. Wright purchased 100 shares of BT
Office Products securities on February 14, 1996, at the
artificially inflated price of $17.75, and has been damaged thereby.
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12. Defendant BT Office Products is a corporation organized
and existing under and by virtue of the laws of the State of
Delaware, with operations throughout the United States, including
in this judicial district. During the Class Period, BT Office
Products stock traded actively in an efficient, open and well-
informed market -- the New York Stock Exchange ("NYSE") -- which
assimilated the information the defendants disseminated to the
investing public. As of November 10, 1995, BT Office Products had
approximately 10 million shares of publicly traded common stock
outstanding.
13. (a) Robert A. J. Huyzer ("Huyzer") has served as
President and Chief Executive Officer of the Company since April
1995, as President of the Office Products Division of KNP BT since
1990, and prior to that as President of the then combined Paper
Merchanting and Office Products Division of N.V. Koninklijke KNP BT
since 1988. Defendant Huyzer is also one of two members of BT
Office Products' Executive Committee.
(b) During 1994, defendant Huyzer received a salary of
$365,744, bonus compensation of $194,506 and other annual
compensation of $434,189. As a result of the performance based
cash bonus component to defendant Huyzer's compensation, defendant
Huyzer had a direct motive to conceal the significant control
weaknesses confronting the Company as these problems might slow the
rapid acquisition strategy pursued by the Company and would thereby
directly reduce the amount of his bonus compensation.
(c) Defendant Huyzer was one of BT Office Products'
chief spokespersons before and during the Class Period. As
President and Chief Executive Officer, he had the responsibility to
review BT Office Products' filings with the SEC, as well as the
Company's press releases and other statements to the financial
press before their dissemination.
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(d) Defendant Huyzer should have known, but for his
reckless disregard of the truth, as a function of his
responsibilities as President and Chief Executive Officer of BT
Office Products, that material adverse information concerning the
Company and financial condition was concealed from the investing
public. Likewise, defendant Huyzer was reckless in not knowing
that material information disseminated by the Company was false and
misleading. As President and Chief Executive Officer of BT Office
Products, defendant Huyzer was responsible for all aspects of BT
Office Products' business. In addition, all areas of BT Office
Products reported to defendant Huyzer, or should have. As a
result, defendant Huyzer was in the best position to know of BT
Office Products' problems with its internal financial controls and
reporting functions. He should have known, but for his reckless
disregard of the truth, that BT Office Products' public statements
which he made or for which he had responsibility to monitor, and BT
Office Products' public reports for which he had responsibility to
supply data and information and to determine the final
presentation, were false and misleading and omitted to state
material facts concerning BT Office Products' financial condition
and its internal controls, as more fully alleged herein. As a
result of providing false information and failing to correct the
false and misleading and/or materially incomplete statements
contained in BT Office Products' publicly disseminated reports and
statements during the Class Period, which he should have known, but
for his reckless disregard of the truth, were false and misleading,
and by omitting to state material facts, defendant Huyzer caused
the Company to misrepresent the Company's financial condition,
results and operations to, and conceal its true state of these
facts from, the investing public, and thereby caused the inflation
of the market price of BT Office Products common stock throughout
the Class Period. Defendant Huyzer was a direct participant in the
scheme, conspiracy and course of conduct perpetrated throughout the
Class Period to conceal, through the dissemination of false and
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misleading statements, the true financial and operating condition
of BT Office Products.
14. (a) John J. McKiernan ("McKiernan") has served as the
Company's Vice President of Finance and Administration and Chief
Financial Officer since January 1995. Defendant McKiernan is a
certified public accountant.
(b) As BT Office Products' Chief Financial Officer,
defendant McKiernan was one of BT Office Products' chief
spokespersons and responsible for providing information to other BT
Office Products' spokespeople before and during the Class Period
regarding the Company's financial condition and internal controls.
In addition, he was responsible for reviewing BT Office Products
public documents, including its press releases and filings with the
SEC as they related to the Company's financial results, condition
and operations. Moreover, as Chief Financial Officer, defendant
McKiernan was the BT Office Products officer primarily responsible
for determining the accuracy of the Company's reported financial
results, the strengths and weaknesses of the Company's internal
financial controls and the financial risks associated with the
Company's past and present acquisition and operational strategies.
(c) Defendant McKiernan should have known, but for his
reckless disregard of the truth, as a function of his
responsibilities as Chief Financial Officer of BT Office Products,
that material adverse information concerning the Company, its
financial condition and its operations was concealed from the
investing public. Defendant McKiernan was in a position to know of
BT Office Products' actual financial control weaknesses. Defendant
McKiernan, therefore, should have known, but for his reckless
disregard of the truth, that BT Office Products' public statements
and public reports, for which he had responsibility to supply
financial and operations data and information, were false and
misleading and omitted to state material facts concerning the
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Company's financial condition, operations and results, as more
fully alleged herein. As a result of providing false information
and/or failing to correct the false and misleading statements
contained in BT Office Products' publicly disseminated reports and
statements during the Class Period, which he should have known, but
for his reckless disregard of the truth, were false and misleading,
and by omitting to state material facts, defendant McKiernan caused
the Company to misrepresent its financial results, condition and
operations to, and conceal its true financial results, condition
and operations from, the investing public, and thereby caused the
inflation of the market price of BT Office Products common stock
throughout the Class Period and benefited thereby. Defendant
McKiernan, who was listed as a "contact" at BT Office Products in
each of the Company's press releases issued during the Class
Period, was a direct participant in the scheme, conspiracy and
course of conduct perpetrated throughout the Class Period to
conceal, through the dissemination of false and misleading
statements, the true financial and operation condition of BT Office
Products.
15. (a) Defendant Howard L. Brown ("Brown") has served as
Regional President, Northeast Region of the Company since January
1995 and as the Chief Executive Officer of BT Summit from October
1987 through December 1994. Mr. Brown was the President and
majority stockholder of Summit Office Supply, Inc., the predecessor
of BT Summit, from 1975 until the acquisition of a controlling
interest in Summit Office Supply, Inc. by the Company in September
1987.
(b) During 1994, defendant Brown received salary
compensation of $288,000 and bonus compensation of $208,800. In
fact, according to the Company's Prospectus, defendant Brown was
the second highest compensated executive of the Company in 1994.
As a result of the performance based cash bonus component to
defendant Brown's compensation, defendant Brown had a direct motive
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to conceal problems in the Company's Northeast Region which he
operated and which had been built around Summit, which he had
founded.
(c) As the Regional President, Northeast Region,
defendant Brown was the BT Office Products' Officer primarily
responsible for all aspects of the operating, controls and
financial reporting for the Northeast Region before and during the
Class Period, and for providing information for inclusion in BT
Office Products' reported financial results, its Prospectus, its
quarterly reports and its Form 10-Qs filed with the SEC as they
related to the operations of the Northeast Region and as those
results were consolidated in the financial statements of BT Office
Products. As a function of his responsibilities, defendant Brown
should have known, but for his reckless disregard of the truth,
that material adverse information concerning the Company, its
financial results, condition and controls were concealed from the
investing public. As a result, defendant Brown was in the best
position to know of BT Office Products' source control weaknesses
in its Northeast Region, and inaccurate financial reports.
Defendant Brown, therefore, should have known, but for his reckless
disregard of the truth, that BT Office Products' public statements
and public reports were false and misleading and omitted to state
material facts concerning BT Office Products' financial results,
condition and controls, as more fully alleged herein. As a result
of failing to correct the false and misleading statements contained
in BT Office Products' publicly disseminated reports and statements
during the Class Period, which he should have known, but for his
reckless disregard of the truth, were false and misleading, and by
omitting to state material facts, defendant Brown caused the
Company to misrepresent its financial controls, condition and
results to, and conceal its true financial controls, condition and
results from, the investing public, and thereby caused the
inflation of the market price of BT Office Products common stock
throughout the Class Period. Defendant Brown was a direct
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participant in the scheme, conspiracy and course of conduct
perpetrated throughout the Class Period to conceal, through the
dissemination of false and misleading statements, the true
financial and operational condition of BT Office Products.
16. Defendant N.V. Koninklijke KNP BT (together with its
affiliates) ("KNP BT"), a holding company organized under the laws
of The Netherlands, is the principal stockholder and beneficial
owner of approximately 70% of BT Office Products issued and
outstanding shares of common stock. Prior to the BT Office
Products' initial public offering, KNP BT was the beneficial owner
of all of the common stock of BT Office Products. In the
Prospectus, KNP BT repeatedly confirmed that, by virtue of its
beneficial ownership of 70% of the outstanding shares of the
Company's common stock, it is in a position to control
substantially all corporate transactions requiring the vote of a
majority of stockholders, including election of the entire Board of
Directors, without the concurrence of other stockholders, and
thereby is in a position to control the Company. Following the
consummation of the public offering, KNP BT, by virtue of its large
majority stock ownership of the Company, continues to have
sufficient voting power to elect the Company's Board of Directors
and control such matters. Currently, four of the six directors of
the Company are also members of the Executive Board and senior
management of KNP BT and, until the public offering, were paid by
KNP BT. In addition, all of the current directors of the Company
were selected by KNP BT. KNP BT and certain of its affiliates have
entered into various transactions and agreements with BT Office
Products, including an intercompany services agreement and a credit
agreement, that became effective upon the completion of the
offering and governs certain ongoing relationships.
17. Defendants Huyzer, McKiernan, and Brown (the "Individual
Defendants"), as the senior operating executive officers of BT
Office Products, had day-to-day responsibilities for managing and
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supervising the operations of BT Office Products. The Individual
Defendants, as officers and/or directors, and KNP BT, as the
controlling shareholder of BT Office Products, are all controlling
persons of the Company. As controlling persons of a company that
is, and at all relevant times was, registered with the SEC under
the federal securities laws, the Individual Defendants and KNP BT
had a duty to disseminate complete, accurate and truthful
information with respect to the Company's financial results,
operations and financial controls, to correct any previously issued
statements that had become materially misleading or untrue and to
disclose any trends that would materially affect the past, present
and future financial operating results of BT Office Products, so
that the market price of the Company's publicly traded securities
would be based upon truthful and accurate information. Under rules
and regulations promulgated by the SEC under the Exchange Act,
specifically Item 303(b) of Regulation S-K, the Individual
Defendants also had a duty to report all trends, demands or
uncertainties that were reasonably likely to impact (i) BT Office
Products' liquidity; (ii) BT Office Products' revenues and/or
income; and/or (iii) previously reported financial information such
that it would not be indicative of future operating results. The
KNP BT's and Individual Defendants' statements and omissions during
the Class Period violated these specific requirements and
obligations, among others.
18. By reason of their stock ownership or other financial
interests, their business relationships and their status as members
of BT Office Products' senior management and/or Board, the
Individual Defendants and KNP BT were, at all relevant times,
"controlling persons" of the Company within the meaning of Section
20(a) of the Exchange Act and had the power and influence (which
they exercised) to cause BT Office Products to engage in the
unlawful conduct complained of herein. Because of their positions
of control, KNP BT and the Individual Defendants were able to and
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did, directly and/or indirectly, control the conduct of BT Office
Products business, and the information about its business contained
in its public statements and filings with the SEC. Throughout the
Class Period, the Individual Defendants and KNP BT were provided
with copies of, reviewed and approved, and/or signed press releases
and other reports prior to or shortly after their issuance and had
the ability and opportunity to prevent their issuance or to cause
them to be corrected. As a result, each of these defendants was
responsible for the accuracy of the public reports, releases and
statements detailed herein as "group published" information and are
therefore responsible and liable for the representations contained
therein.
19. Defendant KNP BT and each of the Individual Defendants
had knowledge of and/or access to the adverse non-public
information concerning BT Office Products' business as described
more fully below. This information was obtained by or available to
KNP BT and the Individual Defendants by means of regularly
generated operating reports distributed or available to the
Company's Board of Directors and corporate management, concerning
the Company's revenues, expenses and sales, internal company
controls, product orders and inventory levels, internal financial
statements and reports generated by the Company, conversations and
contacts with corporate officers and employees, attendance at
meetings of management, the Board and various committees thereof,
and access to reports and other information provided in connection
therewith.
20. Some or all of these reports and documents were provided
to defendant KNP BT and the Individual Defendants as well as other
members of senior management by established distribution lists or
otherwise through ordinary channels of communication. Through
their access to and receipt of some or all of these materials,
defendant KNP BT and Individual Defendants knew or recklessly
-12-
disregarded the adverse non-public information about BT Office
Products particularized below. Except to the extent set forth in
this Complaint, plaintiff and other members of the Class had no
access to such information, which was and remains solely under the
control of defendants.
21. Each of the defendants knew and/or recklessly disregarded
that each of the statements or omissions for which such defendants
are sued was materially false and misleading and/or had been issued
without a reasonable basis.
22. In committing the wrongful acts alleged herein, all of
the defendants pursued a scheme and course of conduct with one
another by issuing materially false and misleading statements to
the public and by concealing material adverse information from the
public. The scheme was designed to and did: (i) deceive the
investing public, including plaintiff and the other Class members,
regarding the past and then current business, operational and
financial condition of BT Office Products; (ii) artificially
inflate and/or maintain the market price of BT Office Products'
publicly traded common stock during the Class Period; and (iii)
cause plaintiff and the other members of the Class to purchase BT
Office Products' common stock at artificially inflated prices.
23. As direct participants in the wrongs complained of
herein, each of the named defendants is jointly and severally
liable for the damages suffered by plaintiff and other purchasers
of BT Office Products common stock during the Class Period for the
violations of Sections 10(b) and 20(a) of the Exchange Act and Rule
10b-5 promulgated thereunder.
CLASS ACTION ALLEGATIONS
24. Plaintiff brings this action as a class action pursuant
to Rule 23 of the Federal Rules of Civil Procedure on behalf of a
Class of all persons who purchased BT Office Products common stock
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during the period January 30, 1996, through March 28, 1996,
inclusive and were damaged thereby. Excluded from the Class are
the defendants, members of the immediate family of the Individual
Defendants, any entities in which any defendant has a controlling
interest, and the legal representatives, heirs, successors,
predecessors in interest, affiliates or assigns of any defendant.
25. The members of the Class are so numerous that joinder of
all members is impractical. BT Office Products has approximately
33.4 million shares of common stock outstanding. Of those
outstanding shares, at least 10 million shares are publicly traded
on the NYSE, and over two million shares were traded during the
Class Period. While the exact number of Class members is unknown
to the plaintiff at this time and can only be ascertained through
appropriate discovery, plaintiff believes that there are at least
several thousand members of the Class.
26. Plaintiff's claims are typical of the claims of the
members of the Class because all members of the Class were
similarly affected by defendants' wrongful conduct in violation of
the federal securities laws complained of herein.
27. Plaintiff will fairly and adequately protect the
interests of the members of the Class and has retained counsel
competent and experienced in class and securities litigation.
Plaintiff has no interests antagonistic to or in conflict with
those of the Class.
28. Common questions of law and fact exist as to all members
of the Class and predominate over any issues affecting solely
individual members of the Class. Among the questions of law and
fact common to the Class are:
(a) whether the federal securities laws were violated by
defendants' acts as alleged in this Complaint;
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(b) whether defendants issued false and misleading
statements concerning BT Office Products' financial and operational
condition and/or omitted to disclose material information
concerning BT Office Products in BT Office Products' public
statements disseminated before and during the Class Period.
(c) whether the members of the Class have sustained
damages and, if so, the proper measure of those damages.
29. A class action is superior to other available methods for
the fair and efficient adjudication of this controversy because,
inter alia, joinder of all members is impracticable. Furthermore,
because the damages suffered by individual Class members may be
relatively small, the expense and burden of individual litigation
make it impossible for Class members to individually redress the
wrongs done to them. There will be no difficulty in the management
of this action as a class action.
30. Plaintiff will rely, in part, upon the presumption of
reliance established by the fraud-on-the-market doctrine in that:
(a) defendants made public misrepresentations during the
Class Period, as alleged in this Complaint;
(b) the misrepresentations were material;
(c) shares of BT Office Products common stock were
traded on a developed national stock exchange, namely the NYSE,
which is an efficient market within the meaning of that term in the
context used in this Complaint; and
(d) plaintiff and the other members of the Class
purchased their BT Office Products securities between the time
defendants made the misrepresentations alleged herein and the time
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the truth was at least partially revealed, without knowledge of the
falsity of the misrepresentations.
31. Based upon the above, plaintiff is entitled to a
presumption of reliance upon the integrity of the market.
Similarly, plaintiff is entitled to a presumption of reliance with
respect to the omissions alleged in this Complaint.
SUBSTANTIVE ALLEGATIONS
The Company's Initial Public Offering
32. BT Office Products is today a leading full-service
distributor of office products, serving primarily medium- and
large-sized businesses and institutions in major markets in both
the United States and Europe. The Company reported in its
Prospectus that it has expanded rapidly since its inception in
1987, with total pro forma net sales and operating income of
approximately $945 million and $25 million, respectively, in 1994.
In the United States, as of July 18, 1995, the Company serviced 25
of the 30 largest metropolitan areas through 19 sales and
distribution centers and 31 additional sales offices in 22 states.
In Europe, the Company states in its Prospectus that it is the
largest office products distributor in Germany and one of the
leading office products distributors in the United Kingdom and The
Netherlands. The Company also serves markets in Austria, France,
Russia, Sweden and Switzerland through licensed dealers for its
"Classic" brand of office supplies.
33. Prior to the completion of its public offering on or
about July 19, 1995, all of the common stock of the Company was
entirely owned by KNP BT (together with its affiliates). Upon
completion of the initial public offering, KNP BT owned
approximately 70% of the issued and outstanding shares of common
stock of the Company (approximately 67% if the overallotment option
granted to the U.S. Underwriters was exercised in full). According
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to the Prospectus, "[b]y virtue of its beneficial ownership of a
majority of the outstanding shares of the Company's Common Stock,
KNP BT will be in a position to control the Company." (Prospectus
at 6, 14, 65.) The Prospectus further states that, prior to the
public offering, through its ownership of all of the common stock
of BT Office Products, KNP BT has had the ability to elect the
Company's Board of Directors and to control the direction and
policies of the Company and the outcome of any matter requiring
stockholder approval, including mergers, consolidations and the
sale of all or substantially all of the assets of the Company, and
to prevent or cause a change of control of the Company.
34. On July 19, 1995, approximately 10,000,000 shares of BT
Office Products were sold in the IPO at a price of $11.50 per
share. This price was determined, according to the Prospectus:
[B]y negotiations between the Company and the [U.S. and
International Underwriters]. Among the factors that were
considered in determining the initial public offering
price were the future prospects of the Company and its
industry in general, sales, earnings and certain other
financial and operating information of the Company in
recent periods, the general condition of the securities
markets at the time of the Offering and the price-earning
ratios, price-sale ratios, market prices of securities
and certain financial and operating information of public
companies engaged in activities similar to those of the
Company.
(Prospectus at 78.)
35. According to the Prospectus, BT Office Products has
pursued a policy of aggressive growth and intends to "continue the
aggressive expansion of its operations, both through acquisitions
and internal growth, in order to create an efficient national and
international network of operations to serve medium- and large-
sized businesses and institutions." (Prospectus at 5.) The
Prospectus states that the success of its growth strategy is keyed
to successful retention of management:
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* Expansion by Acquisition -- In major metropolitan
markets in Europe and the United States where the Company
does not currently have operations, the Company intends
to continue to seek attractive acquisitions of office
products distributors servicing medium- and large-sized
customers with significant sales levels relative to the
size of such market and with an experienced management
team that the Company believes it will be able to retain
following the acquisition. The Company believes that its
policy of retaining the key managers of acquired
companies is a crucial element of the success of its
acquisition strategy. . . . Since January 1, 1994, the
Company has made ten acquisitions (including three in
1995) which contributed significantly to increasing total
net sales from $586.9 million in 1993 to $945.1 million
(on a pro forma basis) in 1994.
(Prospectus at 5 - 6; emphasis added.)
36. The Prospectus further highlighted the retention of
management stating that "[i]t is the Company's policy to retain key
employees of acquired companies. As a result, in many of the
Company's operations, the entrepreneurs and managers who were
responsible for the business before its acquisition remain in key
positions today. Accordingly, the Company benefits from their
substantial local knowledge, customer relationships and operating
and logistics experience." (Prospectus at 6; emphasis added.)
37. The Prospectus again highlighted this strategy with
respect to the Company's prior, current and future acquisitions:
The Company has demonstrated in its previous acquisitions
that it is able to integrate acquired companies into its
business in a relatively short period of time and
believes that it will be able to similarly integrate new
acquisitions in the future. The Company believes that it
has been successful in building its business through
acquisitions as a result of its preference for retaining
existing senior management, whenever possible, to
continue to focus the acquired companies on local market
conditions and customer needs, while centralizing
administrative functions, merchandising, purchasing and
systems development to achieve cost savings through
economies of scale and scope. The Company believes that
its policy of retaining management is an advantage in
competing against other potential acquirers when seeking
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to acquire high-quality contract stationers. . . . The
Company believes that the continued expansion of its
operations through acquisitions, together with the
integration of such acquired companies into the Company,
will create cost savings (through reduced administrative
expenses and additional purchasing power) and increase
sales and total profitability. The Company also intends
to grow within its existing markets by selectively making
add-on acquisitions of smaller contract stationers with
less substantial sales in the Company's existing markets.
Add-on acquisitions increase the Company's sales within
an existing market and generate operating efficiencies,
such as the consolidation of warehouses and
administrative functions.
(Prospectus at 40; emphasis added.)
38. The Company also claimed in its Prospectus that it
employs a new computer reporting system to minimize error and
decrease delays:
Information technology is another critical element of BT
Office Products' operating strategy. The Company
currently employs automated order entry, EDI, reporting
and other information technology systems designed to
decrease response times and error rates and improve
customer service. Current information systems
initiatives include (i) the implementation of the
'National Selling System,' which establishes uniform
account, product and price information across all of the
Company's U.S. regions, (ii) the implementation of new
automated warehouse management systems and (iii) the
development of enhanced and customized EDI software
applications.
(Prospectus at 6.)
39. With respect to the Company's internal controls and
information systems, the Prospectus further stated that:
The Company's information systems initiatives and
administrative programs, together with the increased
sales and purchasing power that result from the Company's
aggressive growth strategy, are designed to generate both
declines in operating costs as a percentage of sales and
higher operating profitability.
(Prospectus at 43; emphasis added.)
-19-
40. The Prospectus also contained financial statements for,
inter alia, BT Office Products' full year 1994 and for the first
quarter of 1995 ended March 31, 1995. These statements showed net
income in 1994 of $1,541,000 versus a loss of $4,892,000 in 1993,
and earnings per share in 1994 of $0.07 per share versus a loss of
$0.21 per share in 1993. For the first quarter of 1995, the
financial reports showed net sales of $269,200,000 versus net sales
for the same period in 1994 of $168,201,000; and first quarter 1995
earnings per share of $0.13 as compared to $0.07 per share earned
for the entire year 1994.
41. Between July 28, 1995, and October 2, 1995, following the
IPO, the publicly traded shares of BT Office Products rose only
slightly from $12-3/8 per share to $13 per share.
Defendants Continue to Tout Retention Of Management
As Key To The Company's Acquisition Strategy
42. On or about October 2, 1995, BT Office Products publicly
announced that it would be expanding its operations into the
Minnesota market with the acquisition of Business Essentials, Inc.
of Minneapolis. The news report confirmed BT Office Products'
announced strategy of retaining current management of its
acquisitions by stating that "[t]he current president of Business
Essentials, [Inc.], Sharon Re, will remain to lead the businesses
following the acquisition. Business Essentials, [Inc.], will be a
part of the BT Office Products Great Lakes Region, under Regional
President David Kirshner, which includes the headquarters in
Chicago, and operations in Columbus, Ohio, and Indianapolis,
Indiana." According to the news release, "[c]ommenting on the
acquisition, Rudolf Huyzer, President and CEO of BT Office Products
International said, 'Business Essentials is an extremely fine
company and an important addition to our U.S. office products
distribution network. It is the first important step, since our
IPO, in the continuation of our acquisition strategy. Business
Essentials provides us with a strong market position and high
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quality management.'" The announcement of the Business Essentials,
Inc. acquisition indicated BT Office Products' "contact" person for
further information was John McKiernan.
43. On October 5, 1995, BT Office Products announced that "it
has expanded its presence in the New York Metropolitan area with
the acquisition of Biber Contract Resources." Consistent with BT
Office Products' stated strategy of retaining management of its
acquisitions, the announcement reported that "[t]he former owner
and president of Biber Contract Resources, Michael Mendelson, will
remain with the Company as President of Contract Furniture for the
Westchester/Connecticut market. Biber Contract Resources will be
part of BT Office Products International's Northeast Region under
Regional President, Howard L. Brown, which includes the
headquarters in New York City and divisions in Boston, Washington
D.C./Baltimore, and Pittsburgh." The news report noted that BT
Office Products' "contact person" for additional information was
John McKiernan.
44. On October 26, 1995, defendant Huyzer announced on the
Business Wires, B.T. Office Products' improved third quarter net
income of $3.7 million for the quarter ended September 30, 1995,
compared with a loss of $400,000 for the comparable quarter in
1994. Earnings per share were $0.12, compared with a loss of $0.02
for the comparable period in 1994. Defendant Huyzer went on to
state that sales for the third quarter of 1995 were $277.7 million,
a 29% increase over the $214.8 million reported for the third
quarter of 1994, and that operating income in the third quarter was
$8.8 million, an 87% increase over the $4.7 million reported for
the third quarter of 1994.
45. Defendant Huyzer further reported that "[w]e are pleased
with our performance for the third quarter. Almost 20 percent of
our 29 percent sales increase for the quarter came from internal
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growth. And, our volume growth coupled with operating efficiencies
from our continued expense control, added to improved earnings in
the third quarter. We're also very excited about the contribution
potential from our recent acquisitions." (Emphasis added.) The
announcement of the third quarter 1995 financial results indicated
the "contact" person at BT Office Products for further information
was John McKiernan.
46. On November 2, 1995, the Dow Jones Newswire reported that
BT Office Products would expand its operations in the Rocky
Mountains area with the acquisitions of Metro Office Products of
Denver. According to this report, Huyzer stated that "Metro will
also serve as our based for further expansion in the region." The
report went on to state that "[a]s is typical of other BTF
acquisitions, the current owners of Metro will remain to lead the
business. Metro will be part of the BT Office Products
Midwest/West Region, under Regional President Richard Dubin, which
includes the headquarters in St. Louis, and operations in Kansas
City, Little Rock, Memphis, Phoenix, Los Angeles, San Francisco,
Portland and Seattle."
47. On or about November 14, 1995, BT Office Products filed
its Form 10-Q with the SEC for its third quarter ended September
30, 1995. The third quarter Form 10-Q reiterated the financial
results previously announced by the Company on October 26, 1995,
with respect to the third quarter and first nine months of 1995, as
well as the comparisons with those comparable periods in 1994.
48. On December 20, 1995, BT Office Products announced on the
PR Newswire that, according to defendant Huyzer, the Company had
letters of intent to acquire 10 office products companies,
including two in Germany, with aggregate annual sales of $130
million at a cost of approximately $32 million in cash. The
location of the eight U.S. acquisitions were Colorado, Florida,
Michigan, New Mexico, North Carolina, Oregon, Pennsylvania and
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Virginia. According to the December 20, 1995 news report, Huyzer
stated that "[t]hese acquisitions strengthen our presence in
desirable, strong growth markets throughout the United States as
well as in the German market, permitting us to further implement
the economics of scale and expanded service network which is our
strategic objective. The synergies created by this expansion
strategy are enabling us to improve profit margins in both the
United States and Europe, which will ultimately increase
shareholder value." (Emphasis added). The BT Office Products PR
Newswire report went on to state that "[a]s is typical of other BT
Office Products' acquisitions, the current owners . . . will be
retained to lead the businesses." (Emphasis added.) As to this
on-going strategy, defendant Huyzer is quoted as stating "[w]e
credit this operating strategy, unique in today's business
environment, with contributing to the rapid and profitable
expansion of BT Office Products over the last several years."
(Emphasis added.)
49. These optimistic reports caused B.T. Office Products
stock to increase in price to approximately $14 per share by
January 30, 1996.
The Class Period Begins -- Defendants' Actionable Misstatements
50. On January 30, 1996, in a PR Newswire report entitled "BT
Office Products International Reports Strong Volume and Profits
Gains For Year End And Fourth Quarter 1995," defendant Huyzer
reported on behalf of the Company that,
Net income totaled $11.2 million, or $0.40 per share, for
the year, compared with $1.5 million, or $0.07 per share,
in the previous year. Sales for the year exceeded well
over $1 billion for the first time in the Company's
history, a 43.4 percent gain to $1,132.4 million in 1995
compared with $789.5 million a year earlier. Operating
income was $36.2 million, up 52.7 percent over the $23.7
million in 1994.
FOURTH-QUARTER RESULTS
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In the fourth quarter ended December 31, 1995, net income
of $4.7 million, or $.14 per share, substantially
exceeded the year-earlier fourth quarter's $0.2 million,
or $0.01 per share, on respective net sales of $309.9
million and $241.5 million. Operating income was $11.3
million in fourth-quarter 1995 as compared with $7.4
million the prior year.
Year-end and fourth quarter 1995 results were influenced
by BT Office Products July 19, 1995 10-million share
public offering and a $118-million capital contribution
on June 30, 1995, from its majority shareholder,
Amsterdam-based KNP BT.
OPERATIONS REVIEW
"An aggressive acquisition program of established office-
products distributors both in the United States and
Europe, as well as significant internal growth at
existing BT Office Products operations, fueled this
rise," Huyzer said. "The results fell within the
expected range and are consistent with our strategic
objectives for 1996."
While the Chicago-based office products distributor does
not report interim results on a geographic segment basis,
the CEO indicated that U.S. sales volume was 73 percent
of the total. Internal growth at existing companies was
a strong 20 percent improvement over the previous year.
"Also, during 1996, we expect to focus our marketing
efforts on continuing internal growth, particularly with
respect to large and national accounts which are
attracted by our extensive offerings of products and
services," Huyzer said.
"In 1995, we made a total of 16 acquisitions, primarily
in important new strategic markets in the U.S. In 1996,
we expect to continue our acquisition program
particularly in Europe, in the important German market,"
he added. "Over time, we expect to grow our operations
equally on both sides of the Atlantic and to expand in
other European markets with measurable profit-growth
potential."
51. Following the report of BT Office Products Fourth Quarter
and full year 1995 results, the price of the Company's publicly
traded shares rose almost $1.50 per share in a matter of days.
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52. Between January 30, 1996, and March 28, 1996, B.T. Office
Products made further optimistic announcements attributed to
defendants Huyzer and McKiernan regarding additional acquisitions
and positive developments within the Company, including those
statements reported on the February 23, 1996 PR Newswire and
February 29, 1996 PR Newswire regarding the Albuquerque acquisition
and $130 million worth of acquisitions, respectively. These
statements continued to tout the Company's strategy of retaining
management, and at no time during this period did any of the
defendants disclose the fact that serious questions had been raised
regarding the January 30, 1996 report of the year-end 1995
financial results or problems regarding the honesty of retained
management in the Company's Northeastern United States region.
53. As a consequence of these optimistic reports, BT Office
Products' publicly traded common stock rose from $15-5/8 on
February 1, 1996, to $22-3/4 by March 28, 1996, and traded at a
price as high as $23.50 within that period.
The Overstatement Of Financial Results Is Revealed
54. On March 28, 1996, in a PR Newswire Report entitled "BT
Office Products International To Restate 1995 Financial Results,"
it was announced "that subsequent to the preliminary fiscal year
1995 accounting close, the Company has discovered certain
accounting and financial reporting irregularities in one of its
U.S. operating divisions. Based on the results to date of its
internal investigation, the Company presently believes the impact
of the charges associated with these issues will reduce previously
reported net income for 1995 by approximately $4.5 million, from
the unaudited amount of $11.2 million to $6.7 million." In
addition, the Company said it will restate net income for 1994 from
a profit of $1.5 million to a loss of $200,000. The Company will
also be restating its quarterly results for 1995.
-25-
55. According to the announcement, the charges result from
the discovery by the Company, based on its internal investigation,
that gross profit margins and operating expenses at its New York
unit were misstated. In addition, the announcement stated that the
Company has also become aware of, and accounted for, a theft of
funds by an individual in the unit as well as missing inventory.
"Based on our investigation, we believe that irregularities we have
discovered are due to the misconduct of a few individuals at a
single unit," said defendant Huyzer. "Key financial management
personnel at the unit have been suspended from their duties pending
the outcome of our investigation. Although we are confident that
proper controls are in place at our other operating units, and have
already taken steps to reconfirm this, we are nonetheless
undertaking a full review of our control systems. Importantly,
none of our customers were affected by these matters. And,
notwithstanding the actions of these few individuals, we have
complete confidence in the people of our New York division and
their commitment to the Company and its customers." (Emphasis
added.) The announcement added that the Audit Committee of the
Board of Directors had authorized legal counsel Winthrop, Stimson,
Putnam & Roberts to engage the accounting firm of Deloitte & Touche
LLP and to conduct a complete investigation to determine the extent
that the irregularities involve misappropriations of Company funds
and assets still to be identified, as well as to determine the
cause of the irregularities, the individuals involved and the
possibility of restitution. The Company stated "that it believed
that the preliminary results of this investigation will be
available in six to eight weeks."
56. The report of the restatement and its causes received
wide publicity in the following days as the market absorbed the
devastating information, including reports on Dow Jones News
Service on March 28, 1996; Capital Market Reports on March 29,
-26-
1996; The Wall Street Journal on March 29, 1996; and in the London
Financial Times on April 1, 1996. In the Dow Jones News Service
report of March 28, 1996, it was reported that the Company said
that it was "undertaking a full review of its control systems at
all of it units even though the company is 'confident' that proper
controls are already in place." In The Wall Street Journal story
of March 29, 1996, it was reported that defendant McKiernan had
stated that "the company learned of the discrepancy last month
[i.e. in February 1996] and has reconstructed the balance sheet
over the past few weeks." (Emphasis added.) In The Financial
Times of London report on April 1, 1996, it quoted defendant KNP BT
as stating that the irregularities came to light through an
internal investigation and involved improper reporting of gross
margins and operating expenses, as well as the theft of funds and
assets.
57. The financial market's reaction to this news was
immediate and severe. On March 29, 1996, the first day of trading
after the announcement, BT Office Products shares plummeted $5.50
per share to close at $16-7/8 per share, representing a drop of
24.6% from the close at $22-3/8 the previous trading day, on
unusually heavy volume of 2.6 million shares. On April 1, 1996,
the stock dropped another $1.00 per share to close at $15-7/8,
representing a total drop of $6.50 as a result of these devastating
revelations, in contradiction to defendants' prior positive
statements about the Company's 1995 financial results.
Defendants Knew Or Were Reckless In Not
Knowing Of The Falsity Of Their Statements
58. Throughout the Class Period, the reported financial
results, including net income, and earnings, of BT Office Products
were materially false and overstated. By virtue of such materially
false and overstated financial results, the market price for BT
Office Products publicly traded common stock rose sharply,
particularly after the announcement of the overinflated and
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materially false financial results on January 30, 1996 for the
Company's Fourth Quarter and full year 1995.
59. Defendants admitted in their public statements made on
March 28, 1996, and thereafter, in conjunction with the revelation
of the material overstatement and falsity of the Company's prior
publicly reported results for the fourth quarter and full year
1995, that: (a) the Company had discovered certain accounting and
financial reporting irregularities at its New York division, which
was directly managed by defendant Brown; (b) that the Company
believed that, as of the time of the announcement, these
irregularities would reduce previously reported 1995 net income by
$4.5 million, and reduce previously reported 1994 net income of
$1.5 million to a loss; (c) that gross profit margins and operating
expenses had been misstated at the New York division operated by
defendant Brown; (d) that the Company was aware of thefts and
missing inventory at the New York Division; (e) that "[k]ey
financial management personnel at the New York Division" had been
suspended; (f) as defendant McKiernan stated, the Company "learned
of the discrepancy last month [i.e. in February 1996] and has been
reconstructing the balance sheet over the past few weeks"; and (g)
the Company, through outside attorneys' and accountants was
conducting a comprehensive review of the entire Company's financial
control system. Thus, defendants admitted that (a) they knew of
the inaccurate, fraudulent and overstated financial results for
1995 since at least February 1996; (b) that insufficient financial
controls existed to monitor and supervise financial management of
at least the Company's New York Division; (c) that the retention of
prior management of the companies acquired that are part of the New
York Division enable entrenched, poorly supervised "key financial
management personnel" were able to manufacture false gross profit
margins and false operating expenses; and the Company's systems of
internal control and financial supervision were so inadequate that
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it would require the Company two to three months to complete the
investigation of the Company by its outside legal and accounting
experts to reconstruct the full extent of the financial and
operating impact of the Company's [illegible print].
60. By virtue of the foregoing, in addition to the false
reports of financial results of BT Office Products for the years
1994 and 1995, including the materially false and overstated
financial results for the Fourth Quarter and full year 1995 issued
publicly on January 30, 1996, numerous statements by defendants
before and during the Class Period, were materially false and
misleading and omitted to state material facts necessary, under the
circumstances in which they were made, not to be false and
misleading. These statements, as particularized above, were
contained in the Company's Prospectus, its press releases, its
statements to the financial press and its third quarter Form 10-Q
for the period ended September 30, 1995. They include:
(a) Defendants' repeated statements described above,
concerning the Company's strategy of retaining current management
of companies it acquires and the benefits of that strategy were
false and misleading (1) because retention of current management at
the New York Division allowed entrenched management to falsify
their financial reporting; and (2) those statements failed and
omitted to disclose the inherent risks in retaining such current
management should such management use its superior knowledge of
their individual unit to defraud or misreport financial data or
steal because they failed and omitted to disclose the risks to BT
Office Products of these semi-autonomous management groups in the
individual regions and divisions, such as the New York Division,
being in a position to generate materially false and overstated
financial results due to the Company's lack of adequate financial
controls.
-29-
(b) Defendants' repeated statements described above,
concerning the Company's sophisticated computer and information
systems lead investors to believe that BT Office Products had
adequate financial controls when, in fact, defendants failed and
omitted to disclose that BT Office Products lacked adequate
financial controls and that such lack of adequate financial
controls was so great that management of the Company's operating
divisions could manufacture gross profit margins, understate
expenses and steal from inventory for a period of at least two
years.
(c) Defendants' repeated statements described above,
about the Company's success in integrating prior acquisitions was
false and misleading, because the New York Division, BT Office
Products first United States acquisition, had not, in fact, been
fully integrated, and, instead, the New York Division was operating
as a rogue division due to BT Office Products' inadequate financial
and operational controls.
61. As a result of the foregoing, taken together, defendants'
statements made in its public documents before and throughout the
Class Period, and omissions to state known material facts and
risks, resulted in a fundamental misrepresentation and misleading
perception of BT Office Products financial and operating conditions
to the investing public and a consequent fraud-on-the-market.
COUNT I
Against All Defendants For Violations Of Section
10(b) of The Exchange Act And SEC Rule 10b-5
And/Or 20(a) Of The Exchange Act
62. Plaintiffs repeat and reallege paragraphs 1 through 61 as
if fully set forth herein.
-30-
63. Throughout the Class Period, the Individual Defendants
and BT Office Products, individually and in concert, directly and
indirectly, by the use and means of instrumentalities of interstate
commerce and/or the mails, engaged and participated in a continuous
course of conduct to misstate and/or conceal adverse material
information about the financial results, earnings and condition of
BT Office Products as specified herein. The Individual Defendants
and BT Office Products employed devices, schemes and artifices to
defraud, while in possession of material adverse non-public
information and engaged in acts, practices, and a course of
fraudulent conduct as alleged herein. Their conduct included the
making of, or the participation in the making of, untrue statements
of material facts and omitting to state material facts necessary in
order to make the statements made about BT Office Products and its
financial and operating condition, in the light of the
circumstances under which they were made, not misleading, as set
forth more particularly herein, and engaged in transactions,
practices and courses of business which operated as a fraud and
deceit upon the purchasers of BT Office Products common stock
during the Class Period.
64. The materiality of defendants' misstatements is evidenced
by, inter alia, the precipitous drop in the price of BT Office
Products' common stock once the truth about BT Office Products'
false financial results was revealed.
65. The Individual Defendants, as officers and/or directors
of BT Office Products, are liable as direct participants in the
wrongs complained of herein. The Individual Defendants were able
to and did control, directly or indirectly, the content of the
public statements and financial statements disseminated by BT
Office Products. With knowledge of the falsity of the statements
contained therein or in reckless disregard of the true financial
results of BT Office Products, the Individual Defendants caused the
false and misleading statements to be issued. The Individual
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Defendants also signed or disseminated public filings with
knowledge or reckless disregard of the fact that the filings were
materially misleading and false in the manner set forth above.
66. Throughout the Class Period, the Individual Defendants
and BT Office Products had actual knowledge of the
misrepresentations and omissions of material facts set forth
herein, or acted with reckless disregard for the truth in that they
failed to ascertain and to disclose such material facts, even
though such facts were available to them. The facts supporting
defendants' scienter include:
(a) At the end of the Class Period defendants admitted
that they learned of the falsification of the Company's financial
results in February 1996, but withheld the existence of that fact,
and permitted the investing public to rely on the accuracy of those
misstated financial results until March 28, 1996; and
(b) Defendants knew or were reckless in not knowing that
the that BT Office Products lacked adequate financial controls and
that the Company's strategy of retaining prior management of
acquired companies, coupled with this lack of adequate financial
controls, created a risk that the Company's semi-autonomous regions
and divisions could provide false information for consolidation
with the Company's financial reports.
67. As a result of the deceptive practices and misleading
statements and omissions, the market price of BT Office Products'
common stock was artificially maintained and/or inflated throughout
the Class Period. In ignorance of the false and misleading nature
of the representations described above, and the manipulative
devices employed by defendants, plaintiff and other members of the
Class, in reliance on either the integrity of the market or
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directly on the statements and reports of defendants, purchased BT
Office Products' common stock at artificially inflated prices.
68. Had plaintiff and other members of the Class known of the
materially adverse information not disclosed by the Individual
Defendants and BT Office Products, they would not have purchased BT
Office Products' common stock at all or at artificially inflated
prices.
69. By virtue of the foregoing, defendant BT Office Products
and the Individual Defendants have violated Section 10(b) of the
Exchange Act, and SEC Rule 10b-5 promulgated thereunder.
70. By virtue of their positions with BT Office Products, the
Individual Defendants and defendant KNP BT had the power, and
exercised the same, to cause BT Office Products to engage in the
wrongful acts described herein. As a result, the Individual
Defendants and defendant KNP BT also are liable as controlling
persons of BT Office Products, pursuant to Section 20(a) of the
Exchange Act.
71. Plaintiff and other members of the Class have been
damaged by the violations of the Individual Defendants, and
defendant KNP BT and BT Office Products as described in this Count
and seek recovery for the damages caused thereby.
JURY DEMAND
72. Plaintiff demands a trial by jury on all issues.
WHEREFORE, plaintiff on her own behalf and on behalf of the
Class she seeks to represent, prays for judgment as follows:
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(a) Declaring this action to be a proper class action,
certifying the Class as requested, and appointing plaintiff as
Class representative under Rule 23 of the Federal Rules of Civil
Procedure;
(b) Awarding compensatory damages in favor of plaintiff
and the other members of the Class against all defendants, jointly
and severally, to the extent described above and alleged by law,
for the damages sustained as a result of the wrongdoing of
defendants, together with pre-judgment and post-judgment interest;
(c) Awarding plaintiff her costs and expenses incurred
in this action, including a reasonable allowance of fees and
expenses for plaintiff's attorneys, accountants and experts; and
(d) Granting such other and further relief as the Court
may deem just and proper.
Dated: April 16, 1996
WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP
/s/
By:____________________________
Daniel W. Krasner, Esq.
David A.P. Brower, Esq.
Neil L. Zola, Esq.
270 Madison Avenue
New York, New York 10016
(212) 545-4600
Attorneys for Plaintiffs
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Of Counsel:
MUCH SHELIST FREED DENENBERG
AMENT & EIGER, P.C.
Michael Freed, Esq.
200 N. LaSalle Street
Suite 2100
Chicago, Illinois 60601-1095
(312) 346-3100
LAW OFFICES OF CHARLES J. PIVEN
Charles J. Piven, Esq.
The Legg Mason Tower, Suite 2700
111 South Calvert Street
Baltimore, Maryland 21202
(401) 332-0030
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5 Jun 1997