Office Depot, Inc. (NYSE: ODP)
MURRAY, FRANK & SAILER LLP is investigating securities fraud claims against Office Depot, Inc. ("Office Depot" or the "Company") (NYSE: ODP) and certain of its officers, on behalf of purchasers of Office Depot securities between July 27, 2010 and March 31, 2011, inclusive (the "Class Period").
The investigation concerns violations of the Securities Exchange Act of 1934 (the "Exchange Act") that occurred when the Company and certain of its officers issued materially false and misleading statements during the Class Period regarding Office Depot's financial statements and business prospects.
Specifically, it is alleged that during the Class Period, the Company and certain of its officers made false and misleading statements about or knew but failed to disclose that (1) the Company improperly recognized $80 million in carry back tax "benefits" for the second, third, and fourth quarters of 2010; (2) the Company improperly reported $63 million in current tax receivables on its balance sheet at December 25, 2010; (3) the Company's financial results were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (4) the Company lacked adequate internal and financial controls; and (5) as a result of the foregoing, during the Class Period, the Company's financial statements were materially false and misleading.
On March 31, 2011, after the close of trading, Office Depot issued a press release announcing that it would restate its financial results for the fiscal year ended December 25, 2010 and the quarters ended June 26, and September 25, 2010, as a result of the Internal Revenue Service's denial of the Company's claim to carry back certain tax losses to prior tax years under economic stimulus-based tax legislation enacted in 2009. The restatement reduced the Company's net earnings for 2010 from $33 million to a net loss of $46 million, and increased the net loss attributable to common shareholder from $0.01 per share to $0.30 per share. Further, the press release reported that the current $63 tax receivable associated with the carry back amount would be removed from the Company's balance sheet at December 25, 2010, which would adversely impact anticipated 2011 operating cash flow. In response to this news, Office Depot's stock price fell from a close of $4.63 per share on March 31, 2011 to a close of $4.21 per share on April 1, 2011, on unusually high trading volume. On April 6, 2011, the Company filed with the SEC an amended 10-K on Form 10-K/A that included the changes to the Company's financials, and identified a material weakness in the Company's internal controls and the steps the Company was taking to change its internal controls.
If you purchased Office Depot securities within the Class Period, you may move the Court, not later than June 6, 2011, to serve as Lead Plaintiff for the class. A Lead Plaintiff is a representative chosen by the Court who acts on behalf of other class members in directing the litigation. You do not need to be a Lead Plaintiff to be included in the class. If you wish to discuss this investigation, or have any questions concerning this notice or your rights or interests with respect to these matters, please contact us.
MURRAY, FRANK & SAILER LLP