Case Page

 

Case Status:    ONGOING    
On or around 09/24/2010 (Court's order of dismissal)

Filing Date: September 11, 2007

According to a press release dated September 11, 2007, the complaint charges Tarragon and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Tarragon is a homebuilder and real estate developer.

The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. As a result of defendants’ false statements, Tarragon stock traded at artificially inflated prices during the Class Period, reaching a high of $26.76 per share on July 22, 2005.

Then, on August 9, 2007, at noon Eastern Time, the Company issued a press release announcing that the filing of its Form 10-Q for the quarter ended June 30, 2007 would be delayed in order to provide additional time for the Company to finalize its evaluation of property impairment charges and other write-downs necessitated by its recent decision to sell certain properties under current adverse market conditions. The impairment charges were expected to be in excess of $125 million. On this news, Tarragon’s stock collapsed $1.88 per share to close at $0.94 per share, a decline of 67% on volume of 18 million shares.

According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company had failed to consolidate an unprofitable variable interest entity into its consolidated financial statements; (b) the Company had failed to properly account for its statement of cash flows by failing to properly classify its cash inflows and cash outflows as operating, investing and financing activities; (c) the Company had failed to timely take property impairment charges and other write downs; (d) due to the deterioration in the real estate credit markets, the Company was experiencing liquidity issues due to its inability to obtain loan modifications and additional financing and there was serious doubt about Tarragon’s ability to continue as a going concern; (e) as the Company was experiencing a massive downturn in its business, Tarragon would not be able to remain in full compliance with all of its debt covenants; and (f) given the increased volatility in the homebuilding industry and the real estate credit markets, the Company had no reasonable basis to make projections about its 2007 results, and as a result, the Company’s projections issued during the Class Period about its 2007 results were at a minimum reckless.

On December 7, 2007, the Court entered the Memorandum and Order consolidating several actions under the caption 07-CV-7972. The Court approved Paul Berger’s appointment of as lead plaintiff and further approved his selection of Abraham of Abraham, Fruchter & Twersky, LLP, as lead counsel.

On January 18, 2008, an amended complaint was filed by the lead plaintiffs against the defendants.

On May 27, 2009, a memorandum and order was granted by the court allowing a stay of the action as to Tarragon, pursuant to 11 U.S.C. § 362 during its bankruptcy proceedings.

On September 24, 2010, an Order was issued by the Court pursuant to the defendant, Tarragon Corporation, filing a voluntary petition for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code. The Court’s order effectively dismissed the case on these administrative grounds.

COMPANY INFORMATION:

Sector: Services
Industry: Real Estate Operations
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: TARR
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 07-CV-07972
JUDGE: Hon. P. Kevin Castel
DATE FILED: 09/11/2007
CLASS PERIOD START: 01/05/2005
CLASS PERIOD END: 08/09/2007
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Abraham, Fruchter & Twersky (New York, One Pennsylvania Plaza)
    One Pennsylvania Plaza, Suite 1910, Abraham, Fruchter & Twersky (New York, One Pennsylvania Plaza), NY 10119
    212.279.5050 212.279.3655 · JFruchter@FruchterTwersky.com
  2. Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
    58 South Service Road, Suite 200, Coughlin Stoia Geller Rudman & Robbins LLP (Melville), NY 11747
    631.367.7100 631.367.1173 · info@csgrr.com/
  3. Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    655 West Broadway, Suite 1900, Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    619.231.1058 619.231.7423 · info@csgrr.com/
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 07-CV-07972
JUDGE: Hon. P. Kevin Castel
DATE FILED: 01/18/2008
CLASS PERIOD START: 01/05/2005
CLASS PERIOD END: 08/09/2007
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Abraham, Fruchter & Twersky (New York, One Pennsylvania Plaza)
    One Pennsylvania Plaza, Suite 1910, Abraham, Fruchter & Twersky (New York, One Pennsylvania Plaza), NY 10119
    212.279.5050 212.279.3655 · JFruchter@FruchterTwersky.com
No Document Title Filing Date