Cohen Milstein Sellers & Toll PLLC Announces Investigation Of AgFeed Industries, Inc.
Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether AgFeed Industries, Inc. (“AgFeed” or the “Company”) and certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Class action lawsuits have been filed in the U.S. District Courts for the Middle District of Tennessee and the District of Colorado by other law firms on behalf of purchasers of the common stock of AgFeed Industries, Inc. (NASDAQ: FEED) between March 12, 2008 and September 29, 2011, inclusive (the “Class Period”).
AgFeed Industries is an international agribusiness with operations in the U.S. and China. The Company has two business lines: (1) animal nutrition; and (2) hog breeding and production.
The complaints allege that AgFeed and certain of its officers and/or directors (“Defendants”) misrepresented and/or failed to disclose that: (1) AgFeed relied on a flawed analysis to account for its debt levels; (2) AgFeed’s allowances for doubtful accounts were highly undervalued; (3) AgFeed's accounts receivable were overvalued and its bad debts were undervalued, causing reported asset values to be overstated and expenses to be understated; and (4) AgFeed failed to properly account for its acquisition of Chinese farm assets for its hog production business in 2007 and 2008.After the market close on September 29, 2011, AgFeed announced that it had established a special committee “ to investigate the accounting relating to certain of the Company’s Chinese farm assets (acquired during 2007 and 2008) used in its hog production business, as well as the validity and collectability of certain of the Company’s accounts receivables relating to its animal nutrition business in China and any other issues that may arise during the course of the investigation.” According to the complaints, the special committee engaged Latham & Watkins LLP to serve as its independent counsel. The Company further stated that it does not intend to provide further comment until after the special committee concludes its investigation. The price of AgFeed shares fell from $0.65 to $0.52 on September 30 and to $0.40 the next trading day, October 3. Cohen Milstein encourages all investors who purchased AgFeed common stock between March 12, 2008 and September 29, 2011 or former employees with information concerning this matter to contact the firm.
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