AgFeed Industries, Inc.
ROBBINS GELLER RUDMAN & DOWD LLP FILES CLASS
ACTION SUIT AGAINST AGFEED INDUSTRIES, INC.
November 1, 2011 – Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/agfeed/) today announced that a class action has been commenced in the United States District Court for the Middle District of Tennessee on behalf of purchasers of AgFeed Industries, Inc. (“AgFeed”) (NASDAQ:FEED) securities during the period between March 12, 2008 and September 29, 2011, inclusive (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from October 18, 2011. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/agfeed/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges AgFeed and certain of its current and former officers and directors with violations of the Securities Exchange Act of 1934. AgFeed is an international agribusiness that deals in animal nutrition products and commercial hog production in the United States and China.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business practices and financial results. As a result of defendants’ false statements, AgFeed’s stock traded at artificially inflated prices during the Class Period, reaching a Class Period high of $20.94 per share on May 5, 2008.
On August 2, 2011, AgFeed issued a press release announcing disappointing preliminary second quarter fiscal 2011 financial results, due in substantial part to its need to take a $9.2 million charge for the collection of outstanding receivables in its animal nutrition business and an additional $5 million to increase its allowance for bad debts from $1.9 million to $7 million. Then, on September 29, 2011, after the market closed, AgFeed issued a press release announcing that its Board had established a special committee to conduct an investigation of “certain of the Company’s Chinese farm assets . . . , as well as the validity and collectability of certain of the Company’s accounts receivables relating to its animal nutrition business in China.” As a direct result of this news, AgFeed stock fell to a close of $0.52 per share on September 30, 2011, a one-day decline of 20% and a 97% decline from the stock’s Class Period high of $20.94 per share.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) AgFeed improperly accounted for its revenue and accounts receivable such that its financial statements were presented in violation of Generally Accepted Accounting Principles (“GAAP”); (b) AgFeed improperly accounted for certain farm-related assets the Company acquired in 2007 and 2008 in violation of GAAP; and (c) defendants failed to maintain proper internal controls related to AgFeed’s accounting for its revenue and assets, including its accounts receivable and certain farm-related assets.
Plaintiff seeks to recover damages on behalf of all purchasers of AgFeed securities during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Robbins Geller Web site (http://www.rgrdlaw.com) has more information about the firm.