Tuesday, September 15, 2009

The albatross around Fleetwood Enterprises

You would have thought that as the assets of Fleetwood Enterprises go through liquidation, the Fleetwood Enterprises story would be pretty much over.

It's not:

At least four class action suits have been prepared against former executives of Riverside-based Fleetwood Enterprises alleging violations of the Securities Exchange Act by issuing false and misleading statements about the company's financial condition between Dec. 6, 2007 and March 10, 2009.

Now to succeed in a lawsuit, you need to show an intent to deceive. And that's just what one set of lawyers claims happened:

In its 38 page filing made Sept. 1, Coughlin Stoia Geller Rudman & Robbins LLP pointed to statements made in press releases by Elden Smith since Dec. 6 that it alleges painted a rosier picture of Fleetwood's condition.

More details can be found in the firm's press release:


New York – September 1, 2009 – Coughlin Stoia Geller Rudman & Robbins LLP (“Coughlin Stoia”) (http://www.csgrr.com/cases/fleetwood/) today announced that a class action has been commenced in the United States District Court for the Central District of California on behalf of purchasers of the common stock of Fleetwood Enterprises, Inc. (“Fleetwood” or the “Company”) (NYSE:FLE) between December 6, 2007 and March 10, 2009, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”). Fleetwood is not named in this action as a defendant because it and its core operating subsidiaries filed for bankruptcy protection in March 2009.

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Coughlin Stoia at 800/449-4900 or 619/231-1058, or via e-mail at djr@csgrr.com. If you are a member of this Class, you can view a copy of the complaint as filed or join this class action online at http://www.csgrr.com/cases/fleetwood/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges certain of Fleetwood’s former executives with violations of the Exchange Act. Fleetwood, together with its subsidiaries, produces and distributes manufactured housing primarily in the United States and Canada.

The complaint alleges that, throughout the Class Period, defendants made numerous positive statements regarding the Company's financial condition, business and prospects. The complaint further alleges that these statements were materially false and misleading because defendants failed to disclose the following adverse facts, among others: (i) that demand for Fleetwood’s manufactured houses and the big homes-on-wheels was rapidly declining, and was adversely affecting the Company’s liquidity; (ii) that the Company’s RV Group sales, especially in its travel trailer division, were declining because of softening consumer demand due to high gasoline prices and the credit crisis; (iii) that the Company’s financial condition was declining precipitously such that the Company was nearing insolvency and would have to file for bankruptcy protection; and (iv) based on the foregoing, defendants had no reasonable basis for their positive statements regarding the Company’s ability to control its deteriorating financial condition.

On March 10, 2009, Fleetwood issued a press release announcing that it had “filed voluntary Chapter 11 petitions for itself and certain operating subsidiaries in the U.S. Bankruptcy Court for the Central District of California.” The Company also announced that it was closing its travel trailer division. As a direct result of information disclosed at the end of the Class Period, the price of Fleetwood common stock fell precipitously, falling to $0.0103 per share on March 10, 2009.

Plaintiff seeks to recover damages on behalf of all purchasers of Fleetwood common stock during the Class Period (the “Class”). The plaintiff is represented by Coughlin Stoia, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Coughlin Stoia, a 190-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Coughlin Stoia Web site (http://www.csgrr.com) has more information about the firm. Contact: Coughlin Stoia Geller Rudman & Robbins LLP Samuel H. Rudman, 800-449-4900 David A. Rosenfeld djr@csgrr.com

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