Lawsuit Filed Against Whitehall Directors, Officers
June 27, 04
Troubled Whitehall Jewellers said “a purported shareholder derivative lawsuit” has been filed against its Board of Directors and certain of its current and former executive officers.
The firm said many of the allegations underlying the claims in the lawsuit appear to be similar to the allegations asserted in previously described purported class action lawsuits filed against it.
The complaint alleges, among other things, that members of the Board of Directors and certain of Whitehall's current and former executive officers breached their fiduciary duties to the company, and seeks unspecified damages on behalf of the company, injunctive relief, restitution and disgorgement of profits.
Six lawsuits were against the company in February with one claiming that the defendants violated federal securities laws by issuing materially false and misleading statements contained in press releases and filings with the Securities and Exchange Commission and was filed in the U.S. District Court for the Northern District of Illinois.
One lawsuit alleged that during the relevant period, the defendants caused Whitehall's shares to trade at artificially inflated levels through the issue of false and misleading financial statements. As a result, defendants were allegedly able to complete an insider trading scheme, raising proceeds of $5.3 million, the suit charged. The other lawsuits were similar in nature.
Whitehall said at the time the lawsuits were without merit and that it intended to defend itself vigorously against these and any subsequent 'copycat' lawsuits.