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Collins & Aikman Corporation Summary: On March 19, 2008, U.S. District Arthur J. Tarnow denied two of defendants’ motions to dismiss and granted in part and denied in part one of the defendant’s motion to dismiss.
On October 19, 2006, on of the individual defendants was voluntarily dismissed with prejudice. On January 11, 2007, defendants’ pending motion to dismiss were denied as moot. On May 4, 2007, a Second Amended Consolidated Class Action Complaint was filed and the defendants responded by filing several motions to dismiss the Second Amended Consolidated Class Action Complaint on July 31, 2007. On August 6, 2007, the Court entered the Order granting the motion to dismiss the Second Consolidated Class Action Complaint as to one of the individual defendants.
As summarized by the lead counsel’s website, on June 6, 2005, motions were made to consolidate the various cases and appoint lead plaintiff and lead counsel. On December 1, 2005, the court consolidated the cases. A consolidated complaint was filed on January 13, 2006. On March 2, 2006, defendants filed a motion to transfer the case to the Eastern District of Michigan. Plaintiff filed an opposition on March 17, 2006. Defendants' filed their motions to dismiss on March 18, 2006. Plaintiff filed an opposition on April 21, 2006, and defendants replied on May 5, 2006. On July 10, 2006, Judge Mukasey of the Southern District of New York officially appointed Wolf Haldenstein lead counsel. On July 12, 2006, he granted defendants' motion for transfer and ordered the clerk to the transfer the case to the Eastern District of Michigan. Because of the transfer, Judge Mukasey declined to rule on defendants' pending motions to dismiss.
In May 2005, Collins & Aikman Corporation filed a Suggestion of Bankruptcy, and on June 8, 2005, the plaintiff Joseph Bruno, plaintiff in the first filed complaint, filed a Notice of Voluntary Dismissal. Similar cases that were also filed in the U.S. District Court for the Eastern District of Michigan were also voluntarily dismissed. Additional complaints were filed against certain officers and/or directors of Collins & Aikman Corporation in the U.S. District Court for the Southern District of New York.
The original complaint charges Collins & Aikman and certain of its current and former officers with violations of the Securities Exchange Act of 1934. More specifically, the complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company improperly accounted for certain supplier rebates; (2) that the Company's financial statements required net adjustments of approximately $10 - $12 million; (3) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a consequence of the foregoing, the Company's net income and financial results were materially overstated at all relevant times.
The complaint further alleges that on or around March 17, 2005, Collins & Aikman announced that after the review of vendor rebates covered an aggregate of approximately $88 million of vendor transactions in fiscal years 2002 through 2004, the company's management believes that net adjustments of approximately $10 - $12 million are required primarily occurring during fiscal 2004. News of this shocked the market. Shares of Collins & Aikman fell $0.39 per share or 23.93 percent, on March 17, 2005, to close at $1.24 per share.
NOTE: On May 17, 2005, Collins & Aikman filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code and is no longer named as a defendant.
INDUSTRY CLASSIFICATION:
SIC Code: 3714
Sector: Consumer Cyclical
Industry: Auto & Truck Parts
| COMPANY/ISSUER NAME: | Collins & Aikman Corporation |
| COMPANY/ISSUER TICKER: | CKC |
| COMPANY WEBSITE: | http://www.colaik.com/ |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Joseph Bruno, et al. v. Collins & Aikman Corporation, et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Class Action Complaint - Jury Trial Demanded | |||
| Type: Complaint | Date on the document: 04/05/2005 | ||
| Joseph Bruno's Notice Of Voluntary Dismissal Without Prejudice | |||
| Type: Notice | Date on the document: 6/8/2005 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 06/08/2005 | ||
| REFERENCE COMPLAINT | |||||||||||||||||
| In Re Collins & Aikman Corporation Securities Litigation | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| Stipulation For The Entry Of An Order Of Voluntary Dismissal Of Jerry L. Mosingo | |||
| Type: Order | Date on the document: 10/19/2006 | ||
| Order Denying Defendant’s Motion To Dismiss [3] As Moot | |||
| Type: Order | Date on the document: 1/11/2007 | ||
| Second Amended Consolidated Class Action Complaint | |||
| Type: Complaint | Date on the document: 05/04/2007 | ||
| Order Denying Motions To Dismiss [32 In 06-13555, 33, 35; 41 In 07-10542, 43, 45, 48, 51]; Granting Motions To Dismiss [36 In 07-10542, 37,46]; Denying In Part And Granting In Part Motions To Dismiss [34 In 06-13555; 40 In 07-10542, 42, 50]; And Denying As Moot Motion To Dismiss [47] | |||
| Type: Order | Date on the document: 3/19/2008 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 7/22/2008 | ||
| Order On Defendant Bryce M. Koth's Motion To Dismiss Second Amended Complaint | |||
| Type: Order | Date on the document: 8/6/2008 | ||
| OTHER DOCUMENTS | |||
| Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded | |||
| Case Name and/or Number: Gersh Korsinsky, et al. v. Collins & Aikman Corp., et al. | |||
| Type: Complaint | Date on the document: 04/08/2005 | ||
| Class Action Complaint For Violations Of Federal Securities Laws | |||
| Case Name and/or Number: Hanna Kleinpeter-Fleck, et all. v. Collins & Aikman Corporation, et al. | |||
| Type: Complaint | Date on the document: 4/13/2005 | ||
| Class Action Complaint for Violations of the Federal Securities Laws - Jury Trial Demanded | |||
| Case Name and/or Number: E.J. Egleston, et al. v. Collins & Aikman Corporation, et al. | |||
| Type: Complaint | Date on the document: 05/23/2005 | ||
| Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded | |||
| Case Name and/or Number: Massimo Gariddi, et al. v. Collins & Aikman Corporation, et al. | |||
| Type: Complaint | Date on the document: 06/01/2005 | ||
| Class Action Complaint For Violations Of Federal Securities Laws | |||
| Case Name and/or Number: Massimo Garridi, et all. v. Collins & Aikman Corporation, et al. | |||
| Type: Complaint | Date on the document: 6/1/2005 | ||
| U.S. District Court Civil Docket | |||
| Case Name and/or Number: Korsinsky, et al. v. Collins & Aikman Corporation, et al. | |||
| Type: Docket | Date on the document: 06/16/2005 | ||
| Consolidated Class Action Complaint [USDC for the SDNY, 05-CV-3791] | |||
| Case Name and/or Number: In Re: Collins & Aikman Corporation Securities Litigation | |||
| Type: Complaint | Date on the document: 1/19/2006 | ||
| Opinion And Order [USDC for the SDNY, 05-CV-3791] | |||
| Case Name and/or Number: In Re: Collins & Aikman Corporation Securities Litigation | |||
| Type: Order | Date on the document: 7/11/2006 | ||
| U.S. District Court Civil Docket [USDC for the SDNY, 05-CV-3791] | |||
| Case Name and/or Number: In Re Collins & Aikman Corporation Securities Litigation | |||
| Type: Docket | Date on the document: 08/15/2006 | ||
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