INVESTOR NOTICE: MURRAY, FRANK & SAILER LLP ANNOUNCES A SHAREHOLDER CLASS ACTION HAS BEEN FILED AGAINST TOWER AUTOMOTIVE, INC. - TWR
New York, NY (PrimeZone) February 22, 2005 - Murray, Frank & Sailer LLP announces that a class action lawsuit has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Tower Automotive, Inc. (“Tower Automotive” or the “Company”) (NYSE: TWR) common stock during the period between February 14, 2003 and January 21, 2005, inclusive (the “Class Period”).
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The complaint charges certain of Tower Automotive’s officers and directors with violations of the Securities Exchange Act of 1934. Tower Automotive is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer. On February 2, 2005, the Company filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the Southern District of New York and, therefore, the Company is not named as a defendant.
The complaint alleges that, during the Class Period, defendants failed to disclose and/or misrepresented the following adverse facts, which were known to defendants, or recklessly disregarded by them, at all relevant times: (a) that the Company was facing increasing pressure from automakers to dramatically lower its prices in order to offset incentives that automakers were having to provide in order to remain competitive; (b) that the costs of steel and other raw materials were continuing to rise and would do so in the future, thereby increasing expenses and, when combined with the squeeze being placed on the Company by automakers, dramatically decreasing the Company’s earnings ability. To the extent that Tower purported to warn of the impact of rising materials’ prices, those warnings were generic in nature and did not advise investors of the full extent of the risks and uncertainties faced by the Company as a result of rising materials’ prices; (c) that early pay programs that had been instituted by automakers in 2001 which enabled automakers to pay suppliers early for products and therefore get a discount were going to be terminated, thereby depriving the Company of a primary source of its liquidity; (d) based on the foregoing, contrary to Defendants' representations, the Company’s financial condition was declining precipitously such that the Company was nearing insolvency and would have to file for bankruptcy; and (e) based on the foregoing, defendants had no reasonable basis for their positive statements regarding the Company’s ability to control its liquidity issues.
Then, on January 20, 2005, the Company issued a press release announcing that longer-than-anticipated holiday shutdowns at certain key customers will reduce liquidity by $40 million during the first quarter of 2005. On the following trading day, Standard & Poor’s (‘S&P’) slashed its rating on Tower Automotive saying that the Company may have to restructure its finances unless business improves over the next two quarters. S&P cut Tower Automotive’s corporate credit rating by three notches to the deeply speculative “CCC” level from “B.”
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or otherwise acquired Tower Automotive securities between February 14, 2003 and January 21, 2005, and sustained damages, you may, no later than April 5, 2005, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff’s counsel Eric J. Belfi or Aaron D. Patton of Murray, Frank & Sailer LLP.
Murray, Frank & Sailer LLP
Eric J. Belfi
Fax: (212) 682-1892
Email: [email protected]