|
Hansen v. Fradella (Home Solutions)
USDC ND Texas
Disclosure; Guidance
Acquisition;
Group Pleading
Background
|
 Company
background
Litigation
background
- Hansen v. Fradella et al
- USDC ND Texas 3:06-cv-01096
- Judge David C Godbey
- Filed 6.20.06
Lead
plaintiffs
- Home Solutions of America Investor Group
SEC
disclosure
- Form 10-Q
8.15.07 At page 35
On June 20, 2006, a class action lawsuit was filed in the United States District
Court for the Northern District of Texas. Home Solutions and the Chief Executive
Officer, President and Chief Financial Officer of Home Solutions were named as
defendants in that action. The complaint alleges claims against Home Solutions
and such officers for violations of the Securities Act of 1934. The complaint
alleges that the defendants disseminated false and misleading information to the
public that misrepresented the accuracy of the Companys financial condition and
future revenue prospects. The complaint further alleges that the effect of the
purported fraud was to manipulate Home Solutions stock price so that the
defendants could profit from the manipulation. The action seeks damages in an
unspecified amount. On June 27, 2006 and on July 6, 2006, two additional class
action lawsuits were filed in the United States District Court for the Northern
District of Texas. Home Solutions and its directors are named as defendants in
those actions. The allegations in these two additional class action lawsuits are
substantially similar to those in the first lawsuit.
|
Claims
|
Complaint
Answer
|
Earnings Guidance
|
The
Company expects to generate record full-year revenue of $55.0 to $60.0 million,
EBITDA of $8.5 to $9.5 million and record net income of $0.14 to $0.18 per fully
diluted share. These results include the acquisition of Cornerstone. The Company
believes that its guidance is conservative, as it has assumed that Cornerstone
will incur significant additional costs in connection with the roll out of its
products to Home Depot and Lowe's. Home Solutions has assumed these expenses, as
it does not have any operating history with either of the national retail
chains.
|
Motion to
Dismiss Granted in part and denied in part
SEC_CODE_REF_0090001192884
|
Motion
to dismiss
Opinion
- For the reasons described above, the Court
dismisses Investors section 10(b) claims against Sanders Morris, Chadwick,
Mattich, OBrien, Marshall, and McCusker. The Court further dismisses each
section 10(b) claim against Fradella and the Home Solutions corporate entity,
except the claim involving the May 23 press release. The Investors section
20(a) claims remain viable. The Court therefore grants in part and denies in
part Sanders Morriss motion to dismiss and grants in part and denies in
part Home Solutions motion to dismiss. Furthermore, the Court grants the
Investors request for leave to amend their complaint in response to this Order
and orders that any such amended complaint be filed within (30) days from the
date of the Order.
|
Supplemental Motion to Dismiss 20(a) Claims Granted
|
Supplemental
motion to dismiss
Order
|
Motion to Lift Discovery Stay
|
Motion
to lift stay
|
Counsel
|
Lead
plaintiff
Company
defense
|
Related Topics
|
