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NexCen Brands, Inc. Summary: The complaint charges NexCen and certain of its officers and directors with violations of the Securities Exchange Act of 1934. NexCen operates as a brand management and franchising company in the United States and internationally. The Company owns, licenses, franchises, and markets a portfolio of brands, including Bill Blass, Waverly, The Athlete’s Foot, Shoebox New York, Great American Cookies, MaggieMoo’s, Marble Slab Creamery, Pretzel Time, and Pretzelmaker.
The complaint alleges that, during the Class Period, defendants issued a series of materially false and misleading statements that misrepresented and failed to disclose: (i) that the Company was able to finance a portion of the Great American Cookies acquisition by agreeing to an accelerated-redemption feature, which would force the Company to pay back half of its borrowing by a certain date; (ii) that the Company was unable to comply with this accelerated-redemption feature, which would reduce the amount of cash available to the Company; (iii) that the Company had no reasonable basis for its earnings guidance for fiscal 2008; and (iv) as a result of the foregoing, the Company’s ability to continue as a going concern was in serious doubt.
Then, on May 19, 2008, the Company announced that it “expects to amend the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007.” The Company also stated that its prior financial guidance for 2008 “is no longer applicable.” Moreover, the Company revealed that it “is actively exploring all strategic alternatives to enhance its liquidity, including potential capital market transactions, the possible sale of one or more of its businesses, and discussions with the company’s lender.” Upon this news, shares of the Company’s stock fell $1.95 per share, or 77%, to close at $0.58 per share, on heavy trading volume.
According to the Company’s FORM 10–K/A For The Fiscal Year Ended December 31, 2007, a total of four putative securities class actions have been filed in the United States District Court for Southern District of New York against NexCen Brands and certain of our former officers and current director for alleged violations of the federal securities laws. These actions are captioned: Mark Gray v. NexCen Brands, Inc., David S. Oros, Robert W. D’Loren & David Meister, No. 08-CV-4906 (filed on May 28, 2008); Ghiath Hammoud v. NexCen Brands, Inc., Robert W. D’Loren, & David B. Meister, No. 08-CV-5063 (filed on June 3, 2008); Ronald Doty v. NexCen Brands, Inc., David S. Oros, Robert W. D’Loren & David Meister, No. 08-CV-5172 (filed on June 5, 2008); and Frank B. Falkenstein v. NexCen Brands, Inc., David S. Oros, Robert W. D’Loren, David Meister, No. 08-CV-6126 (filed on July 3, 2008). Although the formulations of the allegations differ slightly, plaintiffs allege that defendants violated federal securities laws by misleading investors in the Company’s public filings and statements. The complaints assert claims under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, and also assert that the individual defendants are liable as controlling persons under Section 20(a) of the Exchange Act. Plaintiffs seek damages and attorneys’ fees and costs.
On March 5, 2009, the court consolidated the actions and appointed Vincent Granatelli as lead plaintiff and Cohen, Milstein, Hausfeld & Toll, P.L.L.C. as lead counsel. Under the Stipulation and Order entered by the Court on June 19, 2009, the plaintiff shall file an Amended Consolidated Complaint on or before August 24, 2009 and the Company shall file a responsive pleading on or before October 8, 2009, with any opposition and reply briefing due on November 23, 2009 and December 23, 2009, respectively.
On August 24, 2009, the lead plaintiff filed a Consolidated Amended Class Action Complaint.
INDUSTRY CLASSIFICATION:
SIC Code: 6794
Sector: Financial
Industry: Investment Services
| COMPANY/ISSUER NAME: | NexCen Brands, Inc. |
| COMPANY/ISSUER TICKER: | NEXC |
| COMPANY WEBSITE: | http://www.nexcenbrands.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Mark Gray, et al. v. NexCen Brands, Inc., et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Class Action Complaint For Violations Of Securities Laws | |||
| Type: Complaint | Date on the document: 05/28/2008 | ||
| Summary Order Consolidating Actions, Appointing Lead Plaintiff, And Approving Lead Counsel | |||
| Type: Order Appointing LP/LC | Date on the document: 03/05/2009 | ||
| REFERENCE COMPLAINT | |||||||||||||||||
| In Re: NexCen Brands, Inc. Securities Litigation | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 09/25/2009 | ||
| OTHER DOCUMENTS | |||
| Class Action Complaint - Jury Trial Demanded | |||
| Case Name and/or Number: Ghiath Hammoud, et al. v. NexCen Brands, Inc., et al. | |||
| Type: Complaint | Date on the document: 06/03/2008 | ||
| Class Action Complaint | |||
| Case Name and/or Number: Ronald Doty, et al. v. NexCen Brands, Inc., et al. | |||
| Type: Complaint | Date on the document: 06/05/2008 | ||
| Class Action Complaint | |||
| Case Name and/or Number: Frank Falkstein, et al. v. NexCen Brands, Inc., et al. | |||
| Type: Complaint | Date on the document: 07/03/2008 | ||
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