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Lerach Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit against Par Pharmaceuticals Companies Inc.

NEW YORK -- Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach Coughlin") (http://www.lerachlaw.com/cases/par/) today announced that a class action lawsuit has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Par Pharmaceutical Companies Inc. ("Par" or the "Company") (NYSE:PRX) securities during the period between April 29, 2004, and July 5, 2006 (the "Class Period").

If you wish to serve as lead plaintiff, you must move the Court no later than September 15, 2006. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or David A. Rosenfeld of Lerach Coughlin at 800/449-4900 or 619/231-1058 or via e-mail at wsl@lerachlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.lerachlaw.com/cases/par/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges Par and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Par engages in the manufacture and distribution of generic and branded drugs in the United States.

According to the complaint, throughout the Class Period, defendants issued materially false and misleading statements that misrepresented the following adverse facts: (i) that Par was materially overstating its financial performance by failing to properly reserve for customer credits and uncollectible accounts. During the Class Period, Par overstated its income by at least $55 million; (ii) that Par was failing to timely write-down the value of impaired inventory. During the Class Period, Par overstated the worth of its inventory by at least $15 million; and (iii) based on the foregoing, Par's Class Period financial statements were materially false and misleading and not prepared in accordance with Generally Accepted Accounting Principles ("GAAP").

The complaint further alleges that, on July 5, 2006, Par admitted that its previously issued financial results and financial statements materially overstated the Company's financial performance and that the Company's financial statements were not prepared in accordance with GAAP. On that date, Par issued a press release announcing that it would be restating its financial statements for fiscal years 2004, 2005 and the first quarter of 2006 to correct for "an understatement of accounts receivable reserves which resulted primarily from delays in recognizing customer credits and uncollectible customer deductions." The Company reported that the effect of the restatement over reported periods will be $55 million, that the Company would also write down $15 million in inventory and that its prior financial statements "should not be relied upon." In response to the announcement of the restatement, the price of Par stock dropped from $18.25 per share to $13.47 per share on extremely heavy trading volume.

Plaintiff seeks to recover damages on behalf of all purchasers of Par securities during the Class Period (the "Class"). The plaintiff is represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Lerach Coughlin, a 180-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston, Philadelphia and Seattle, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Lerach Coughlin lawyers have been responsible for more than $20 billion in aggregate recoveries. The Lerach Coughlin Web site (http://www.lerachlaw.com) has more information about the firm.
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Publication:Business Wire
Date:Jul 19, 2006
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