| Company: | Sirva, Inc. |
| Ticker Symbol: | NYSE: SIR |
| Class Period: | November 25, 2003 to November 9, 2004 |
| Date Filed: | Nov-24-04 |
| Lead Plaintiff Deadline: | Jan-18-05 |
| Court: | Northern District, IL |
| Allegations: |
A class action lawsuit was filed on November 24, 2004, on behalf of purchasers of the securities of Sirva, Inc. ("Sirva" or the "Company") (NYSE:SIR) between November 25, 2003 and November 9, 2004, inclusive (the "Class Period") seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act").
The action is pending in the United States District Court for the Northern District of Illinois, Eastern Division (Chicago) against defendants Sirva, Brian P. Kelley (CEO, Pres.) Joan E. Ryan (CFO), James W. Rogers (Chairman) and Richard J. Schnall (director).
The complaint alleges that Sirva's financial statements issued during the class period, in its IPO prospectus, press releases, quarterly and annual SEC reports and its secondary prospectus, were materially false and misleading because: (i) Sirva's insurance and claim reserves were grossly inadequate and unreasonable and (ii) as a result of the foregoing, the earnings and shareholders' equity reported by the Company were materially inflated, violated generally accepted accounting principles and failed to give a fair representation of Sirva's true results and financial condition. In addition, the complaint alleges that defendants mischaracterized Sirva's business structure, calling it "asset-light" and scalable, which (if that were true) would have given it financial flexibility, allowing it to weather lulls in business without incurring high-fixed costs. In fact, as the Company would later admit, its business, especially its European operations, were "asset-intensive" and saddled with high fixed-costs that presented a serious, but undisclosed, risk to Sirva's operations and ability to maintain profitability.
On November 9, 2004, Sirva announced, in a press release discussing its third quarter 2004 results, that it would take a $15.2 million charge to bolster its insurance reserves, which severely and negatively impacted its earnings. Its insurance business had deteriorated to the point that the Company would discontinue entire lines of its insurance business. In addition, the Company also reported poor results from its European operations. In a follow-up conference call, Sirva's CEO, defendant Kelley, stated that the reason behind the disappointing European results was high fixed costs, a situation that was being remedied through a substantial restructuring. These disclosures caused Sirva's stock price to drop from $23.78 per share on November 9, 2004 to $17.95 per share on November 10, 1004, a one day drop of 24.5%, on unusually heavy trading volume. During the Class Period, entities in which defendants Rogers and Schnall had financial and controlling interests sold 6,403,476 shares in the IPO and 15,022,831 shares in the secondary offering (21,426,307, total), thereby giving defendants a strong incentive to create the illusion that the Company's financial performance was better than it actually was.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
The action is pending in the United States District Court for the Northern District of Illinois, Eastern Division (Chicago) against defendants Sirva, Brian P. Kelley (CEO, Pres.) Joan E. Ryan (CFO), James W. Rogers (Chairman) and Richard J. Schnall (director).
The complaint alleges that Sirva's financial statements issued during the class period, in its IPO prospectus, press releases, quarterly and annual SEC reports and its secondary prospectus, were materially false and misleading because: (i) Sirva's insurance and claim reserves were grossly inadequate and unreasonable and (ii) as a result of the foregoing, the earnings and shareholders' equity reported by the Company were materially inflated, violated generally accepted accounting principles and failed to give a fair representation of Sirva's true results and financial condition. In addition, the complaint alleges that defendants mischaracterized Sirva's business structure, calling it "asset-light" and scalable, which (if that were true) would have given it financial flexibility, allowing it to weather lulls in business without incurring high-fixed costs. In fact, as the Company would later admit, its business, especially its European operations, were "asset-intensive" and saddled with high fixed-costs that presented a serious, but undisclosed, risk to Sirva's operations and ability to maintain profitability.
On November 9, 2004, Sirva announced, in a press release discussing its third quarter 2004 results, that it would take a $15.2 million charge to bolster its insurance reserves, which severely and negatively impacted its earnings. Its insurance business had deteriorated to the point that the Company would discontinue entire lines of its insurance business. In addition, the Company also reported poor results from its European operations. In a follow-up conference call, Sirva's CEO, defendant Kelley, stated that the reason behind the disappointing European results was high fixed costs, a situation that was being remedied through a substantial restructuring. These disclosures caused Sirva's stock price to drop from $23.78 per share on November 9, 2004 to $17.95 per share on November 10, 1004, a one day drop of 24.5%, on unusually heavy trading volume. During the Class Period, entities in which defendants Rogers and Schnall had financial and controlling interests sold 6,403,476 shares in the IPO and 15,022,831 shares in the secondary offering (21,426,307, total), thereby giving defendants a strong incentive to create the illusion that the Company's financial performance was better than it actually was.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
