Securities Litigation: Heelys Inc

Rines v. Heelys Inc et al
USDC ND Texas
'33 Act
IPO

Background

Company background

Litigation background

Rines v. Heelys Inc et al
USDC ND Texas (Dallas) 3:07-cv-01468

Judge Ed Kinkeade
Filed 8.27.07

Lead plaintiffs

Alaska-Aivazian Group

SEC disclosure

Form 10-Q 8.11.08 at page 29
The Company, its former Chief Executive Officer, its former Chief Financial Officer, and its directors who signed the Companys registration statement filed with the Securities and Exchange Commission in connection with our December 7, 2006 initial public offering (the IPO)along with Capital Southwest Corporation, Capital Southwest Venture Corporation and the underwriters for the IPOare defendants in a lawsuit originally filed on August 27, 2007 in the United States District Court for the Northern District of Texas, Dallas Division, by plaintiff Brian Rines, Individually and On Behalf of All Others Similarly Situated, purportedly on behalf of all persons who purchased the Companys common stock pursuant to or traceable to the IPO registration statement. The complaint alleges violations of Sections 11 and 15 of the Securities Act of 1933. The plaintiff seeks an order determining that the action may proceed as a class action, awarding compensatory damages in favor of the plaintiff and the other class members in an unspecified amount, and reasonable costs and expenses incurred in the action, including counsel fees and expert fees. Four similar lawsuits were also filed in September and October 2007 in the United States District Court for the Northern District of Texas, Dallas Division, by plaintiffs Vulcan Lee, John Avila, Gerald Markey, and Robert Eiron on behalf of the same plaintiff class, making substantially similar allegations under Sections 11, 12, and 15 of the Securities Act of 1933, and seeking substantially similar
damages. These lawsuits have been transferred to a single judge and have been consolidated into a single action. Lead plaintiffs and lead counsel have been appointed. An amended consolidated complaint was filed on March 11, 2008. The amended complaint alleges that the prospectus used in connection with our IPO contained misstatements of material fact or omitted to state material facts necessary in order to make the statements made not misleading relating to among other allegations, safety concerns and injuries associated with our products and their alleged impact on demand, visibility into our sales channel and competition from knockoffs, in violation of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and requests substantially similar damages and relief as previously mentioned. Defendants filed motions to dismiss the amended consolidated complaint on May 12, 2008. Briefing on the motions will be completed on August 11, 2008.

Claims

Complaint