Judge classifies pasta lawsuit class action
Thursday, March 29, 2007
KANSAS CITY, Mo. -- A federal judge has certified a shareholder lawsuit alleging widespread fraud at American Italian Pasta Co. as a class action lawsuit.
U.S. District Judge Otrie Smith said Monday that the lawsuit will cover shareholders who bought or owned stock in the company on or before Jan. 23, 2002, and who owned shares on Aug. 9, 2005.
Company officials said they don't comment on pending litigation.
Eight lawsuits were filed in August 2005 after the Kansas City, Mo.-based company said it was under investigation by the Securities and Exchange Commission. The company said it would miss filing required financial reports and is now restating its reports dating to 2000.
The lawsuit claims that between January 2002 and August 2005 company officials used a number of schemes to hide inventory and inflate sales figures so they could sell shares at higher prices and meet Wall Street expectations.
The dry pasta-maker was delisted from the New York Stock Exchange in December after missing an exchange deadline to file its 2006 annual report. The stock can still be found on the over-the-counter market and was down 10 cents to $10.60 in trading Wednesday.