- News>
- Companies & Commodities
Investor sues Levi over inflated bond prices, income
San Francisco, Jan 24: A Levi Strauss investor has sued the struggling jeans maker, accusing the company of artificially boosting bond prices by overstating income and painting too rosy a picture of the company`s finances.
San Francisco, Jan 24: A Levi Strauss investor has sued the struggling jeans maker, accusing the company of artificially boosting bond prices by overstating income and painting too rosy a picture of the company’s finances. The lawsuit, filed in the US district court in San Francisco , claims that since January ’01, Levi Strauss provided false and misleading information to the public as the San Francisco-based company negotiated lines of credit, issued bonds and projected a turnaround in its flagging business.
Plaintiff Richard Orens, who filed the lawsuit in December, seeks a jury trial and unspecified damages on behalf of investors who bought Levi Strauss securities between January ’01 and October ’03. “The scheme deceived the investing public regarding Levi Strauss’ business, operations, management, and the intrinsic value of Levi Strauss bonds and caused the plaintiff and other members of the class to purchase Levi Strauss securities at artificially inflated prices,” the lawsuit said. Levi Strauss spokeswoman Linda Butler said the privately-held company, which reports earnings because of its publicly traded debt, would “vigorously defend itself in court”.
The company, whose credit rating has been slashed due to a high debt load and poor performance, faces a host of problems as it works to recharge a legendary brand and reverse years of sliding sales.
In December, the company replaced its former CFO Bill Chiasson and hired outside turnaround specialist Alvarez & Marsal. Earlier this month the company shut down its last US plant, marking the end of 150 years of manufacturing jeans in the US . Mr Chiasson’s departure also followed Levi Strauss’ disclosure that it would delay its third-quarter earnings report because it had discovered accounting errors for past years and would have to correct prior earnings reports.
Bureau Report
Plaintiff Richard Orens, who filed the lawsuit in December, seeks a jury trial and unspecified damages on behalf of investors who bought Levi Strauss securities between January ’01 and October ’03. “The scheme deceived the investing public regarding Levi Strauss’ business, operations, management, and the intrinsic value of Levi Strauss bonds and caused the plaintiff and other members of the class to purchase Levi Strauss securities at artificially inflated prices,” the lawsuit said. Levi Strauss spokeswoman Linda Butler said the privately-held company, which reports earnings because of its publicly traded debt, would “vigorously defend itself in court”.
The company, whose credit rating has been slashed due to a high debt load and poor performance, faces a host of problems as it works to recharge a legendary brand and reverse years of sliding sales.
In December, the company replaced its former CFO Bill Chiasson and hired outside turnaround specialist Alvarez & Marsal. Earlier this month the company shut down its last US plant, marking the end of 150 years of manufacturing jeans in the US . Mr Chiasson’s departure also followed Levi Strauss’ disclosure that it would delay its third-quarter earnings report because it had discovered accounting errors for past years and would have to correct prior earnings reports.
Bureau Report