According to the complaint, plaintiff brings this action on behalf of all persons or entities who purchased or otherwise acquired shares of FBN common stock between February13, 2013 and August 5, 2013, inclusive (the “Class Period”), seeking to pursue remedies under §§10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). The Exchange Act claims allege that Defendants engaged in a fraudulent scheme to artificially inflate the Company’s stock price. As a result of the fraud described below, the Company has lost a substantial portion of its market capitalization.
Defendant FBN maintains principal executive offices in St. Louis, Missouri. FBN manufactures and distributes residential furniture. The Company’s products include stationary upholstery products, occasional furniture, recliners and sleep sofas. The Company’s trade names include, among others, Thomasville, Broyhill, Lane, and Drexel Heritage. The Company utilizes trademarks and trade names extensively to promote brand loyalty among consumers and views such trademarks and trade names as valuable assets that it aggressively protects. FBN carries its trade names on its books as assets, which are tested annually for impairment by comparing the carrying value and fair value of each trade name to determine the amount, if any, of impairment.
Plaintiff alleges that Defendants have fraudulently inflated FBN’s stock price during the Class Period by disseminating materially false and misleading statements, and failing to disclose material information known or recklessly disregarded by Defendants, concerning the
Company’s true financial condition, operation and business prospects.
Specifically, throughout the Class Period, Defendants made false and misleading statements and/or failed to disclose that: (a) the Company was experiencing weaknesses in its wholesale business; (b) the Company’s trade names were being carried at inflated values that would require material impairments; (c) the Company was experiencing severe liquidity issues; (d) and based upon the above, the Defendants lacked a reasonable basis for their positive statements about the Company during the Class Period.
As a result of Defendants’ wrongful acts, false and misleading statements and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.
A consolidated complaint was filed on May 5, 2014.
On January 27, 2015, the Court issued an Order granting Defendants' Motion to Dismiss. Judgment was entered in favor of Defendants. On February 26, the Plaintiffs filed a Notice of Appeal of the above decision. The Appeal was dismissed on May 15.