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Robbins Geller Rudman & Dowd LLP Files Class Action Suit against Central European Distribution Corp.

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  Published in House and Home on Monday, October 24th 2011 at 15:31 GMT by Market Wire
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NEW YORK--([ BUSINESS WIRE ])--Robbins Geller Rudman & Dowd LLP (aRobbins Gellera) ([ http://www.rgrdlaw.com/cases/cedc/ ]) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the District of New Jersey on behalf of purchasers of the common stock of Central European Distribution Corp. (aCEDCa or the aCompanya) (Nasdaq: CEDC) between August 5, 2010 and February 28, 2011, inclusive (the aClass Perioda).

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiffas counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at [ djr@rgrdlaw.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.rgrdlaw.com/cases/cedc/ ]. Any member of the putative 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 CEDC and certain of its officers and directors with violations of the Securities Exchange Act of 1934. CEDC operates primarily in the alcohol beverage industry as one of the largest producers of vodka in the world and Central and Eastern Europeas largest integrated spirit beverages business.

The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Companyas business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (i) that CEDC had double digit declines in its vodka portfolio and its loss of market share in Poland was growing steeper as discounters were taking shares; (ii) that the seriousness in the market share declines required that CEDC take an impairment charge which CEDC did not record on a timely basis; (iii) that the launch of the Companyas new vodka product, Zubrowka Biala, with significant market spending in the form of rebates, was having a materially adverse effect on gross margin and impacted the channel mix in the market; and (iv) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and growth.

On March 1, 2011, the Company issued a press release announcing its results for the full year 2010, surprising the market and reporting a net loss from continuing operations on a U.S. Generally Accepted Accounting Principles basis for the year of $92.9 million, or $1.32 per fully diluted share, as compared to a net profit of $72.7 million, or $1.35 per fully diluted share, for the same period in 2009. Following the full year earnings announcement, defendants held a conference call with analysts and investors, wherein defendants disclosed for the first time an excise tax issue in production in Russia, where they had a dispute with authorities on an old excise stamp count, which resulted in the loss of two weeks of limited production runs, with one week having nothing produced in the middle of November, their akey selling period.a In response to the unexpected earnings announcement, shares of the Companyas stock fell $8.52, or more than 37%, to close at $14.33 per share, on extremely heavy trading volume.

Plaintiff seeks to recover damages on behalf of all purchasers of CEDC common stock during the Class Period (the aClassa). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, 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. The Robbins Geller Web site ([ http://www.rgrdlaw.com ]) has more information about the firm.