Berman DeValerio Pease Tabacco Burt & Pucillo filed the class action in the U.S. District Court for the District of Minnesota. The lawsuit seeks damages for violations of federal securities laws on behalf of all investors who purchased Buca common stock between February 6, 2001 and March 11, 2005 (the "Class Period").
The lawsuit alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, including U.S. Securities and Exchange Commission ("SEC") Rule 10b-5.
Buca is a Minneapolis-based company that owns and operates 107 restaurants around the country. The complaint alleges that the defendants issued false and misleading financial statements throughout the Class Period. During that time, according to the complaint, the Company materially overstated its income (or understated its losses), overstated its revenues, lacked adequate internal controls, and failed to follow generally accepted accounting practices.
Beginning in February 2005, Buca issued a series of news releases and SEC filings that disclosed these facts to the investing public, triggering a decline in the Company's stock price, the complaint says.
Among other facts, the complaint alleges that:
On February 7, 2005, Buca announced that the SEC had ordered an investigation to determine whether the Company had violated securities laws.
On February, 11, 2005, the Company disclosed in an SEC filing that it had "incorrectly applied the accounting rules with respect to certain operating lease transactions." As a result, the company said, it planned to restate previously filed financial statements.
On March 11, 2005, the Company issued a news release saying it would notify the SEC it was delaying its fiscal year 2004 annual report.
On March 16, 2005, Buca announced the dismissal of two top executives.
On July 25, 2005, Buca filed a complaint against two former executives alleging, among other things, that the former executives took secret cash payments from vendors and misappropriated Company assets by having the Company pay for their personal travel and vacations.
Finally, on July 25, 2005, according to the complaint, the Company restated certain of its financial results -- reducing income by approximately $20 million over fiscal years 2000 through 2003 -- and stated that it was taking "remedial measures" to correct material weaknesses in its "system of internal control over financial reporting."
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