This is a securities class action lawsuit against NexCen Brands Inc. and certain of its officers and directors.
NexCen operates as a brand management and franchising company in the United States and internationally. NexCen owns, licenses, franchises, and markets a portfolio of brands, including Bill Blass, Waverly, The Athlete's Foot, Shoebox New York, Great American Cookies, MaggieMoo's, Marble Slab Creamery, Pretzel Time, and Pretzelmaker.
The class action complaint alleges that, during the Class Period, NexCen issued a series of materially false and misleading statements that misrepresented and failed to disclose:
(i) that NexCen was able to finance a portion of the Great American Cookies acquisition by agreeing to an accelerated-redemption feature, which would force NexCen to pay back half of its borrowing by a certain date;
(ii) that NexCen was unable to comply with this accelerated-redemption feature, which would reduce the amount of cash available to NexCen;
(iii) that NexCen had no reasonable basis for its earnings guidance for fiscal 2008; and
(iv) as a result of the foregoing, NexCen's ability to continue as a going concern was in serious doubt.
Then, on May 19, 2008, NexCen announced that it "expects to amend the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007." NexCen also stated that its prior financial guidance for 2008 "is no longer applicable." Moreover, NexCen revealed that it "is actively exploring all strategic alternatives to enhance its liquidity, including potential capital market transactions, the possible sale of one or more of its businesses, and discussions with the company's lender."
Upon this news, shares of NexCen Brands' stock fell $1.95 per share, or 77%, to close at $0.58 per share, on heavy trading volume.
Name (Stock Symbol)
NexCen Brands, Inc. (NEXC.PK)
NexCen owns and manages seven brands, which it franchises to third parties. Those brands include Quick Service Restaurants, Great American Cookies, MaggieMoos, Marble Slab Creamery, Pretzel Time and Pretzelmaker, The Athletes Foot and Shoebox New York.
The information provided on ClassAdvocate.com is general in nature,
does not apply to any particular factual situation, and is not and
should not be taken as legal or other professional advice. We make no
commitment or warranty that the factual, legal or any other information
on ClassAdvocate.com, or on any linked website, is accurate, complete,
error-free, or current. As such, you should not rely on such information,
and should seek professional advice if and as you determine appropriate.
ClassAdvocate.com is not a lawyer referral service, and no attorney-client
or confidential relationship is or should be formed by use of the site.
The investigations listed on ClassAdvocate.com are attorney advertisements
and do not in any way constitute a referral or endorsement by ClassAdvocate.com
or any approved or authorized lawyer referral service.