Ernst Home Centers, Inc. - Securities Class Action

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Stanford Law School

Ernst Home Centers, Inc. Conclusion: On April 10, 1997, the Court dismissed the class action suit, writing that the "plaintiffs have not alleged that there was any intentional wrongdoing by defendants" and that Ernst had properly disclosed their business risks.

According to the complaint, the Class Period commences with Ernst's initial public offering ("IPO") of common stock which raised approximately $41.5 million from investors. The IPO was possible only as a result of defendants' misrepresentations and omissions of fact concerning the financial performance and condition of Ernst. These misrepresentations and omissions operated to artificially inflate the price of Ernst's common stock at the initial offering and throughout the Class Period. The IPO offering material presented a rosy picture of a company well positioned in an industry which was experiencing dramatic growth.

As reported in the Company’s FORM 10-Q For the Quarterly Period Ended July 27, 1996, on July 12, 1996, Ernst Home Center, Inc. (the "Company") filed a voluntary petition for relief under Chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware. Two former Directors, one former officer and one current officer, who is a Director, of the Company are named as defendants in a class action complaint alleging among other things, misrepresentation and omissions of fact in connection with the Company's initial public offering of common stock. The complaint was filed in the United States District Court for the Western District of Washington at Seattle. The Company is not named as a defendant in this complaint.

INDUSTRY CLASSIFICATION:
SIC Code: 5211
Sector: Services
Industry: Retail (Home Improvement)

COMPANY/ISSUER NAME:	Ernst Home Centers, Inc.
COMPANY/ISSUER TICKER:	ERNSQ
COMPANY WEBSITE:

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

P. Anthony Fazio, et al. v. Victor H. Palmieri, et al.

COURT: W.D. Washington	DOCKET NUMBER: 96-CV-1096
JUDGE NAME: Hon. Carolyn R. Dimmick
DATE FILED: 07/16/1996	SOURCE: Other
CLASS PERIOD START: 09/27/1994	CLASS PERIOD END: 01/26/1996
TYPE OF COMPLAINT: Unamended/Unconsolidated
PLAINTIFF FIRMS IN THIS OR SIMILAR CASE:
Hagens Berman & Mitchell 2425 East Camelback Road; Suite 620, Phoenix, AZ, 85016 (voice) 602.840.5900., (fax) 602.840.3012, Hagens Berman, LLP 1301 Fifth Avenue Suite 2900, Seattle , WA, 98101 (voice) 206.623.7292, (fax) , info@hagens-berman.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 2

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violations of the Federal Securities Laws and Pendent State Claims
Type: Complaint		Date on the document: 07/16/1996

REFERENCE COMPLAINT

P. Anthony Fazio, et al. v. Victor H. Palmieri, et al.

COURT: W.D. Washington	DOCKET NUMBER: 96-CV-1096
JUDGE NAME: Hon. Carolyn R. Dimmick
DATE FILED: 01/07/1997	SOURCE: Business Wires
CLASS PERIOD START: 09/27/1994	CLASS PERIOD END: 01/26/1996
TYPE OF COMPLAINT: First Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Hagens Berman Sobol Shapiro LLP 1301 Fifth Avenue, Suite 2900, Seattle, WA, 98101 (voice) 206-623-7292, (fax) 206-623-0594, info@hbsslaw.com Lovell Mitchell & Barth 11542 N.E. 21st Street, Ste A , Bellevue, WA, 98004 (voice) 425-452-9800, (fax) , _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 2

DOCUMENTS FOR THE REFERENCE COMPLAINT
Order Granting Defendants' Motion To Dismiss Complaint
Type: Order		Date on the document: 04/10/1997
U.S. District Court Civil Docket
Type: Docket		Date on the document: 04/10/1997

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

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