This is a securities fraud class action against ADVO Inc. and certain of its officers and directors with violations of the Securities Exchange Act of 1934.
ADVO is a direct mail media company that engages in soliciting and processing printed advertising from retailers, manufacturers, and service companies in the United States and Canada. The class action complaint alleges that during the Class Period, ADVO issued materially false and misleading statements regarding the ADVO's business and financial results, concealing material adverse problems in ADVO's long-term financial health and intrinsic value. ADVO concealed this information in order to accomplish a merger which ADVO had entered into with Valassis Communications, Inc., to create the largest integrated media services provider in the nation.
Valassis was acquiring all of ADVO's outstanding common stock in an all cash transaction. As a result of defendants' false statements, investors believed the acquisition would occur, causing ADVO's stock to trade at artificially inflated prices during the Class Period, reaching a high of $36.80 per share in August 2006. Then, on August 30, 2006, Valassis announced that it had filed an action to rescind its merger agreement with ADVO. On this news, the Company's shares fell to $28.59 per share. According to the complaint, to accomplish the merger, ADVO officers and employees concealed material information, including that: (a) its business had deteriorated so badly that it would never be replaced; (b) its financial internal controls were woefully inadequate; and (c) its business was not as nearly successful as the market and Valassis had been led to believe.
Name (Stock Symbol)
Valassis (NYSE: VCI) acquired Advo, Inc. in March 2007. Advo, Inc., was a direct mail marketer, dispatching 16 million pieces of advertising to American homes every week. With an address list of over 126 million, comprising virtually every household in the United States, Advo could deliver materials to a huge array of consumers
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.