Suit alleges Western Waste securities law violations.Shareholder contends material facts were not revealed Western Waste Industries officials violated federal securities laws by failing to disclose material information which they knew could derail de·rail intr. & tr.v. de·railed, de·rail·ing, de·rails 1. To run or cause to run off the rails. 2. the firm's proposed merger with Browning Ferris Industries, a shareholder alleged in a lawsuit filed in federal court in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. earlier this month. The shareholder, New York-based Croyden Associates, alleged that Torrance-based Western Waste failed to disclose negative financial results and was demanding "golden parachutes golden parachute, a contract given to top executives of a corporation to provide benefits in case of job loss due to a takeover by another firm or a merger. The unusually generous benefits may include substantial severance pay, a one-time bonus payment when " for executives -- events it knew would likely prevent a merger with BFI BFI - brute force and ignorance . Croyden Associates bought Western Waste stock after its Sept. 2 announcement that it intended to merge with Houston-based BFI, said Stuart D. Wechsler, attorney for Croyden. Croyden then "lost a lot of money" when Western Waste announced on Oct. 8 that the merger was off and Western Waste's stock price plunged by $6.75 a share, Wechsler said. "We believe we have not violated any laws in regards to the transaction we entered (to merge with BFI)," said Rich Widrig, Western Waste vice president of finance and investor relations Investor relations The process by which the corporation communicates with its investors. . Western Waste has retained Los Angeles-based law firm Orrick, Herrington & Sutcliffe and intends "to vigorously defend the case," Widrig said. He declined to comment on specifics in the lawsuit. Wechsler, senior partner of Wechsler Skirnick Harwood Halebian & Feffer, a New York-based law firm which specializes in shareholders' lawsuits, has filed the suit as a class action on behalf of all persons who bought the common stock of Western Waste between Sept. 2 and Oct. 7. Wechsler said he is seeking cash or stock in an amount yet to be determined for those shareholders. Western Waste announced on Sept. 2 that it had signed a letter of intent to be acquired by BFI with 1.02 shares of BFI stock being swapped for every Western Waste share. At that time, Western Waste's stock was trading at $17 a share and BFI's at $24.87 a share. Western Waste's stock price rose on the news and was trading between $19 and $20 a share until Sept. 29 when it dropped by $2 a share. The New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. halted trading on the stock on Sept. 30 when there were more sell orders than buy orders for the shares. On Sept. 30 Western Waste issued at least two press releases in which it said it "knows of no reason for the recent activity in the stock" and that it "currently expects" to merge with BFI subject to "satisfactory completion of the due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. process," the suit states. "On Oct. 8 Western Waste finally announced what it knew or should have known, that the merger with BFI would not, and, in fact, could not happen as a result of the financial condition and employment practices of Western Waste," the suit alleges. The lawsuit alleges that the press releases were "materially false and misleading." It also alleges that Western Waste failed to disclose: * Its financial statements for its fiscal year ended June 30 would post a significant negative change in Western Waste's results of operations; * Its financial condition was harmed to such a degree that it would not be able to file its required Securities and Exchange Commission reports in a timely manner; * BFI's due diligence would likely discover Western Waste's eroding financial condition; and * Western Waste's employment practices, including extensive nepotism nep·o·tism n. Favoritism shown or patronage granted to relatives, as in business. [French népotisme, from Italian nepotismo, from nepote, nephew, from Latin and corresponding unreasonable demands for "golden parachutes," would likely prevent consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of a definitive merger agreement with BFI on the terms announced. Western Waste's Widrig said the company filed with the SEC its 10-K, the financial report for its fiscal year ended June 30, on Oct. 15, two days after its extended deadline of Oct. 13. Widrig said the SEC did not grant the company permission to file late and its late filing was caused by the company adding certain material events to the document, including the fact that the merger was called off on Oct. 8 and Wechsler filed suit on Oct. 13. In the 10-K, Western Waste reported a net loss of $4.9 million for the fiscal fourth quarter and a loss of $10.1 million for the fiscal year. Wechsler would not comment on why he was alleging that nepotism and demands for rich severance packages A severance package is pay and benefits an employee receives when they leave employment at a company. In addition to the employee's remaining regular pay, it may include some of the following:
He also declined to reveal how much stock his client, Croyden Associates, had bought or provide a business description of Croyden Associates. Wechsler did say, however, that Croyden "is not a widower widower n. a man whose wife died while he was married to her and has not remarried. WIDOWER. A man whose wife is dead. A widower has a right to administer to his wife's separate estate, and as her administrator to collect debts due to her, generally for or an orphan orphan: see adoption; foundling hospital; guardian and ward. See widow & orphan. Orphan See also Abandonment. Adverse, Anthony finally, at middle age, discovers origins. [Am. Lit. ." |
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