Murray, Frank & Sailer LLP is investigating a class action lawsuit on behalf of all securities purchasers of Nash Finch Company (“Nash Finch” or the “Company”) (NasdaqNM: NAFC) from February 24, 2005 and October 20, 2005, inclusive (the "Class Period").
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The firm is investigating whether the Company and certain of its officers violated the Securities Exchange Act of 1934. The investigation concerns whether the defendants failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the merger between Nash Finch and Roundy's Distribution Center was plagued by integration problems; (2) that the Company's net sales growth rate and earnings growth rate could not be sustained due to the integration issues with the Roundy's Distribution Center; (3) that the Company's core business was under-performing; (4) that the Company failed to maintain adequate internal controls; and (5) that as a result of the above, the defendants' fiscal projections were lacking in any reasonable basis when made.
On October 20, 2005, the Company issued a press release announcing significantly lower fiscal 2005 earnings guidance of $3.00 to $3.25 per share, from its previous guidance of $3.70 and $3.89. The Company attributed the lowered guidance to “a decline in retail gross profit margins, primarily reflecting inadequate execution in pricing across the Company's retail operations; depressed wholesale gross profit margins principally relating to manufacturer promotional spending; and higher than expected acquisition integration costs.” In reaction to this news, the price of Nash Finch stock fell $12.11 per share, or 28.6 percent, from its closing price of $42.34 on October 20, 2005, to close at $30.23 on October 21, 2005.
During the Class Period defendants were motivated to engage in the fraudulent and wrongful conduct in order to sell more than $300 million in notes in a private placement and in order for Company insiders, including defendant Marshall, to sell more than $17 million of their privately held Nash Finch shares while in possession of material adverse non-public information about the Company.
The firm of Murray, Frank & Sailer LLP is investigating a class action lawsuit seeking to recover damages on behalf of purchases of Nash Finch in connection with the conduct herein described. If you would like to discuss this announcement, or your rights and interests, please contact Eric J. Belfi ([email protected]) or Christopher S. Hinton ([email protected]) of Murray, Frank & Sailer LLP.
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