Shareholder Class Action Filed Against Central European Distribution Corporation by the Law Firm of Kessler Topaz Meltzer & Che

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Shareholder Class Action Filed Against Central European Distribution Corporation by the Law... -- RADNOR, Pa., Nov. 15, 2011 /PRNewswire/ --

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RADNOR, Pa., Nov. 15, 2011/PRNewswire/ -- The following statement was issued today by the law firm of Kessler Topaz Meltzer & Check, LLP:

Notice is hereby given that a class action lawsuit was filed in the United States District Court for the District of New Jersey on behalf of purchasers of the securities of Central European Distribution Corporation ("CEDC" or the "Company") (NASDAQ: [ CEDC ]), who purchased or otherwise acquired CEDC securities between August 5, 2010 and February 28, 2011, inclusive (the "Class Period").  If you are a member of this class, you can view a copy of the Complaint or join this class action online at [ http://www.ktmc.com/cases_details.php?id=53 ].

Members of the class may, not later than December 23, 2011, move the Court to serve as lead plaintiff of the class.  A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation.  In order to be appointed lead plaintiff, the Court must determine that the class member's 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 of whether or not to serve as a lead plaintiff.  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 CEDC and certain of its officers and directors with violations of the Securities Exchange Act of 1934.  CEDC is one of the largest producers of vodka in the world and is Central and Eastern Europe's largest integrated spirit beverage business.  The Company exports its products to markets that include the United States, England, France and Japan.  CEDC also is an importer of alcoholic beverages in Poland, Russia and Hungary, and an importer of premium spirits and wine in Russia.

The Complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company's financial well-being, business operations, and prospects.  Specifically, defendants failed to disclose or indicate the following: (1) that the Company was experiencing significant declines in its vodka portfolio; (2) that the Company was losing market share in Poland as discounters were taking market share from the Company; (3) that the Company's Zubrowka Biala product launch was having a materially adverse effect on CEDC's gross margins and had impacted the channel mix in the market; (4) that as a result, CEDC was required to take an impairment charge primarily related to two of its Polish brands, and that this impairment charge was not recorded on a timely basis; (5) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (6) that the Company lacked adequate internal and financial controls; (7) that, as a result of the foregoing, the Company's financial statements were materially false and misleading at all relevant times; and (8) that the defendants' financial guidance and positive statements about the Company's future prospects were lacking in any reasonable basis when made.

On March 1, 2011, CEDC shocked investors when it announced dismal financial results for fiscal year 2010 and issued disappointing guidance for the 2011 fiscal year.  For fiscal 2010, the Company reported a net loss from continuing operations of $92.9 million, or ($1.32) per diluted share, compared to a net profit of $72.7 million, or $1.35 per diluted share, for fiscal 2009.  Additionally, the defendants disclosed for the first time that the Company had faced a "production issue" in Russia that had "halted a significant portion of our production needs for approximately two weeks during our peak selling period."  The defendants further revealed that the production issue alone necessitated a $30 million to $35 million charge.  Moreover, the defendants revealed that the Company would take an impairment charge for fiscal 2010 totaling $152 million, "primarily [related to] the Absolwent and Bols brands in Poland."  Further, the defendants disclosed that the Company had experienced double-digit declines in its vodka portfolio, and that the launch of its Biala product, and the promotional plans that went along with it, had cannibalized 30% to 35% of the Company's existing portfolio.  Upon the release of this news, shares of the Company's stock fell $8.52 per share, or over 37 percent, to close on March 1, 2011 at $14.33 per share, on unusually heavy trading volume.  

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP (Darren J. Check, Esq. or David M. Promisloff, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at [ info@ktmc.com ].  For additional information about this lawsuit, or to join the class action online, please visit [ http://www.ktmc.com/cases_details.php?id=53 ].

Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Kessler Topaz Meltzer & Check, which prosecutes class actions in both state and federal courts throughout the country.  Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world.

For more information about Kessler Topaz Meltzer & Check, or for additional information about participating in this action, please visit [ www.ktmc.com ].

SOURCE Kessler Topaz Meltzer & Check, LLP

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