NEW YORK, March 8, 2002 (PRIMEZONE) -- A class action lawsuit was filed by Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) against Elan Corporation PLC ("Elan" or the "Company") (NYSE:ELN), on behalf of all persons or entities who purchased American Depository Shares ("ADRs") of Elan during the period between April 23, 2001 through February 4, 2002, inclusive (the Class Period). The lawsuit was filed in the United States District Court, Southern District of New York under Civil Action Number: 02 CV 1021. Shareholders who purchased the ADRs of Elan during the Class Period have until Friday April 5, 2002 to seek appointment by the Court as one of the lead plaintiffs in this action.
The lawsuit charges that Elan and three of the Company's senior officials issued materially false and misleading statements to the market concerning Elan's revenues and earnings prospects. In particular, it is alleged that during the Class Period, defendants improperly reported favorable financial results for the Company, which were artificially inflated. Elan allegedly manipulated its results by improperly accounting for joint ventures that it entered into with other companies, the primary purpose of which was to create the appearance of income growth for the Company. The Company invested in these joint ventures, which then used the proceeds to fund purchases from Elan, which Elan then reported as revenues. In an article published in the Wall Street Journal on January 30, 2002, former Securities and Exchange Commission ("SEC") Chief Accountant Lynn Turner reportedly questioned the propriety of Elan's accounting practices. Following this article, the price of Elan ADRs fell from $35.20 to $29.25.
Thereafter, on February 4, 2002, Elan shocked the market by issuing a Press Release, which detailed the Company's 2001 financial results and effectively acknowledged the Company's misleading accounting for "off-balance sheet arrangements." The Press Release stated that Elan had two QSPEs ("Qualified Special Purpose Entities") which it had not consolidated in its financial results as presented under Generally Accepted Accounting Principles ("GAAP"). The Company further revealed that if these QSPEs had been consolidated, 2001 profit under GAAP would have been $211.4 million, or $0.59 per share, instead of the reported $347.7 million, or $0.94 per share as was originally reported. Furthermore, if these QSPEs were included, Elan's total debt would have been almost $3 billion, approximately $1 billion more than originally reported. As a result of this news, Elan's ADRs fell, closing at $14.85 a share, a total decline of over 50% from the pre-revelation price.
If you purchased the ADRs of Elan during the Class Period, you have until Friday, April 5, 2002 to ask the Court to appoint you as one of the lead plaintiffs for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. If you wish to review a copy of the Complaint, to discuss this action or have any questions, please contact Andrew G. Tolan, Esq. of the Pomerantz firm at 888-476-6529 (or (888) 4-POMLAW), toll free, or at agtolan@pomlaw.com by e-mail. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca