This is a securities fraud class action lawsuit against Tarragon Corp. and certain officers and directors alleging that they issued materially false and misleading statements regarding the Tarragon's business and financial results.
According to the class action complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows:
(a) Tarragon had failed to consolidate an unprofitable variable interest entity into its consolidated financial statements;
(b) Tarragon had failed to properly account for its statement of cash flows by failing to properly classify its cash inflows and cash outflows as operating, investing and financing activities;
(c) Tarragon had failed to timely take property impairment charges and other write downs;
(d) due to the deterioration in the real estate credit markets, Tarragon was experiencing liquidity issues due to its inability to obtain loan modifications and additional financing and there was serious doubt about Tarragon's ability to continue as a going concern;
(e) as Tarragon was experiencing a massive downturn in its business, Tarragon would not be able to remain in full compliance with all of its debt covenants; and
(f) given the increased volatility in the homebuilding industry and the real estate credit markets, Tarragon had no reasonable basis to make projections about its 2007 results, and as a result, the Company's projections issued during the Class Period about its 2007 results were at a minimum reckless.
As a result of defendants' false statements, Tarragon stock traded at artificially inflated prices during the Class Period, reaching a high of $26.76 per share on July 22, 2005.
Name (Stock Symbol)
Tarragon Corporation (TARRQ.PK)
Tarragon Corporation and its subsidiaries engage in the development, ownership, and management of real estate properties in the United States.
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