Class action suit filed against Donnkenny.

NEW YORK--(BUSINESS WIRE)--Nov. 21, 1996--On November 21, 1996, a securities class action lawsuit was filed on behalf of purchasers of the securities and sellers of puts in the stock of Donnkenny, Inc. ("Donnkenny") during the period February 14, 1995 through November 15, 1996.

The Complaint charges Donnkenny and certain of its officers with violations of the federal securities laws (Sections 10(b) and 20(a) of the Securities Exchange Act of 1934) by, among other things, misrepresenting and/or omitting material information concerning Donnkenny's operating condition and financial results.

It is alleged that defendants made material representations concerning Donnkenny's operations and reported financial results, including net sales, net income, and earnings per share. Defendants' representations led securities analysts following the Company and investors to believe that Donnkenny had achieved a historical 30% growth rate in earnings per share, and would continue to achieve strong double-digit growth. In reliance on the truth of defendants' representations, Donnkenny common stock traded at inflated prices, rising as high as $21.25 per share on June 4, 1996.

The Complaint further alleges that the defendants knowingly manipulated Donnkenny's reported operating results during the Class Period by overstating revenue and understating expenses. As a result, Donnkenny's reported sales, net income, and earnings per share for its fiscal years ended December 3, 1994 and December 2, 1995, and for the first two quarters of fiscal 1996, ended March 2, 1996 and June 1, 1996, were materially overstated. Although Donnkenny has publicly stated that those financial statements were materially misstated and should not be relied upon, it has not yet issued the full restatement for those periods disclosing the magnitude of the fraud.

Although all material facts have not yet been revealed, based on the disclosures of defendants' fraud that have been made, Donnkenny common stock has fallen dramatically, more than 86%, from its high during the Class Period, to close at $4.1875 on November 18, 1996 (the first trading day after the end of the Class Period).

It alleged that the individual defendants caused Donnkenny to report overstated operating results in order to benefit from the sale by them, or members of their immediate family, during the Class Period, of hundreds of thousands of shares of Donnkenny common stock. The plaintiff, a limited partnership which suffered substantial losses as a result of defendants alleged wrongful conduct is represented by the firm of Wolf Popper Ross Wolf & Jones, L.L.P. ("Wolf Popper") which has more than 35 years of experience in prosecuting securities class actions and which has successfully recovered hundreds of millions of dollars for defrauded investors and shareholders. Wolf Popper's reputation and expertise in shareholder and other class action litigation has been repeatedly recognized by the Courts.

If you are a member of the class described above, you may, if you so choose, but not later than 60 days from today, move the court to serve as lead plaintiff. If you have any questions about, or wish to discuss, this action, please contact Stephen D. Oestreich or Robert C. Finkel at Wolf Popper Ross Wolf & Jones L.L.P., 845 Third Avenue, New York, New York 10022, 212/759-4600 or via Internet electronic mail at [e-mail]

CONTACT: Wolf Popper Ross Wolf & Jones L.L.P., New York

Stephen D. Oestreich/Robert C. Finkel

212/759-4600

E-mail: [e-mail]