This is a securities fraud class action lawsuit against Par Pharmaceutical Companies, Inc.
Par Pharmaceutical, headquartered in New Jersey, develops, manufactures and markets more than 110 generic drugs and innovative branded pharmaceuticals for specialty markets. The class action complaint alleges that throughout the class period, Par Pharmaceutical reported earnings that were materially inflated as a result of accounting errors including an understatement of accounts receivable reserves. Par Pharmaceutical has now admitted that the overstatement of its revenues has resulted in Par Pharmaceutical overpaying its business partners in various profit sharing arrangements. As a result of the Par Pharmaceutical's internal review of its trade accounts receivable balances, Par Pharmaceutical has decided to restate its previously reported financial statements for fiscal year 2004 and 2005 and the first quarter of 2006. In addition, Par Pharmaceutical announced it will write-off inventory in an amount up to $15 million due to flawed physical inventory procedures.
In response to these revelations, on July 6, 2006, Par stock fell $4.78 per share, losing nearly 26% of its value in one day on extremely high volume of over 9 million shares traded, to close at $13.47 per share.
Name (Stock Symbol)
Par Pharmaceutical Companies, Inc. (PRX)
Par Pharmaceutical Companies, Inc. manufactures generic drugs and pharmaceuticals.
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