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Rigrodsky & Long, P.A. Announces Class Action Lawsuit Against Central European Distribution Corporation

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  Published in House and Home on Tuesday, October 25th 2011 at 15:57 GMT by Market Wire
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WILMINGTON, Del.--([ BUSINESS WIRE ])--[ Rigrodsky & Long, P.A. ] announces that a class action lawsuit has been filed in the United States District Court for the District of New Jersey on behalf of all persons or entities who purchased or otherwise acquired the stock of Central European Distribution Corporation (aCEDCa or the aCompanya) (Nasdaq: [ CEDC ]) between August 5, 2010 and February 28, 2011, inclusive (the aClass Perioda), alleging violations of the Securities Exchange Act of 1934 (the aComplainta).

If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact [ Timothy J. MacFall, Esquire ] or [ Noah R. Wortman, Case Development Director ] of Rigrodsky & Long, P.A., 919 North Market Street, Suite 980 Wilmington, Delaware, 19801 at (888) 969-4242, by e-mail to [ info@rigrodskylong.com ], or at: [ http://investigations.rigrodskylong.com/centraleuropeandistributioncorp-cedc/ ].

CEDC, together with its subsidiaries, produces, imports, and distributes alcoholic beverages in Poland, Hungary, and the Russian Federation.

The Complaint names CEDC and certain of the Companyas directors and officers as defendants. The Complaint alleges that during the Class Period, defendants made materially false and misleading statements regarding the Companyas financial health. Specifically, defendants failed to disclose and/or misrepresented that: (1) the Company had double digit declines in its vodka portfolio and its loss of market share in Poland was growing steeper as discounters were taking shares; (2) the severity of the its market share declines required that CEDC take an impairment charge, which defendants caused CEDC to delay recording on a timely basis; and (3) the launch of its new product, Zubrowka Biala, with major market spending in the form of rebates had an adverse effect on gross margin and impacted the channel mix in the market. As a result, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and growth.

On March 1, 2011, CEDC issued a press release wherein it announced its full year and fourth quarter 2010 financial results. CEDC announced a net loss from continuing operations on a U.S. GAAP basis for the year of $92.9 million or $1.32 per fully diluted share, as compared to 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, the Company held a conference call with analysts and investors, wherein defendants disclosed for the first time an excise tax issue relating to CEDCas production in Russia, which adversely impacted the Companyas production in mid-November, CEDCas akey selling period.a

In addition, CEDC also revealed that its Polish lenders have waived a breach of consolidated coverage ratio and net leverage ratio covenants for the period ending December 31, and has amended the ratios for the period ending March 31, 2011. In return for the waiver, CEDC will have to pay the lenders a fee of 3.3 million zlotys. The amount under the overdraft facilities included in the credit facility will also be reduced and CEDC will have to pay higher interest rates.

In response to its surprising earnings announcement, CEDCas shares reacted by falling more than 37%, to close at $14.33 per share on March 1, 2011, on very heavy trading volume.

If you wish to serve as lead plaintiff, you must move the Court no later than December 23, 2011. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class memberas claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed 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.

While [ Rigrodsky & Long, P.A. ] did not file the Complaint in this matter, the firm, with offices in Wilmington, Delaware and Garden City, New York, [ regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation ], including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.

Attorney advertising. Prior results do not guarantee a similar outcome.