Class-action lawsuit against Prestige Brands unlikely to start before spring
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- December
- 13
A federal judge has set a timetable for both sides to exchange information in a shareholder lawsuit against Prestige Brands Holdings Inc. of Irvington, but a trial is unlikely to start before the spring of next year.
Prestige Brands sells a variety of well-known household consumer products, such as Compound W wart remover, Comet and Spic and Span cleaners, Murine eye drops, and Chloraseptic cough syrup.
Lawsuits emerged after the initial public offering of Prestige Brands stock in February 2005. Chief Executive Officer Peter C. Mann and Chief Financial Officer Peter J. Anderson were among those selling 28 million shares of stock at $16 a share.
In July 2005 the shares lost nearly half their value after the company missed sales estimates. The following November Prestige Brands said it would restate its financials for the three preceding fiscal years and the first quarter of fiscal 2006.
Shareholders who subsequently sued the company include individual investors, some union and municipal pension funds, and a brokerage. The individual lawsuits were consolidated into a single case in U.S. District Court in White Plains.
The lawsuits included an allegation that Mann and Anderson had touted an expected increase in Prestige Brand sales despite their knowledge that Wal-Mart had bought Compound W in quantities that it likely wouldn’t need and would end up returning.
In a pre-trial ruling last July, however, U.S. District Judge Charles Brieant dismissed claims that management acted fraudulently.
Among other things, Brieant said that shareholders had failed to offer any factual evidence for a prospective jury that managers had manipulated Compound W sales. Shareholders also failed to show that Mann and Anderson had any fraudulent motives; each man retained more than 80 percent of their stock in the company after putting the rest up for sale in the IPO.
Brieant let stand claims by shareholders that the registration statement and prospectus for the IPO were not prepared according to generally accepted accounting principles, and that the documents misstated market demand for certain key Prestige Brands products.
Brieant set an attorneys’ conference for May 18. Mann and a Prestige Brands attorney could not be reached for comment.
The company stock closed yesterday at $12.25, up 30 cents.
This entry was posted
on Wednesday, December 13th, 2006 at 6:44 pm by Jerry Gleeson.
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Category: In the courts
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Could it be that a certain judge got paid off?
It’s beyond me how Medtech Products Inc. can release ‘Compound W’ to the public in the first place. Knowing full well that as soon as the bottle is opened within 4 or 5 days, give or take, the solution becomes gel like & soon after is no longer applicable meaning you have to purchase yet another bottle to continue treatment. I’m on my 4th bottle at $8.00 a bottle & finally gave up. Of course right in front of the box it sais (Pharmacist #1 Recommended Brand) & god knows the pharmaceutical Company would never give there seal of approval & do anything shady in the name of profit.
Fritz in Sacramento
fritz95824@yahoo.com
Could it be that a certain judge got paid off?
It’s beyond me how Medtech Products Inc. can release ‘Compound W’ to the public in the first place. Knowing full well that as soon as the bottle is opened within 4 or 5 days, give or take, the solution becomes gel like & soon after is no longer applicable meaning you have to purchase yet another bottle to continue treatment. I’m on my 4th bottle at $8.00 a bottle & finally gave up. Of course right in front of the box it sais (Pharmacist #1 Recommended Brand) & god knows the pharmaceutical Company would never give their seal of approval & do anything shady in the name of profit.
Fritz in Sacramento