The Manhattan law firm Lerach Coughlin Stoia Geller Rudman & Robbins LLP filed the class-action suit late Tuesday in U.S. District Court in Brooklyn, charging Pall and certain of its officers and directors with issuing "materially false and misleading statements that misrepresented and failed to disclose" that the company was overstating its financial results by understating its tax liability.
Pat Iannucci, a Pall spokeswoman, said, "We intend to defend the action vigorously."
The class-action suit noted that Pall reported it could owe more than $130 million in taxes, exclusive of interest or penalties, and that its financial statements for the fiscal years 1999 through 2006 "should no longer be relied upon and that a restatement of some or all of those financial statements will be required."
Pall said after markets closed July 19 that the audit committee of its board of directors had begun an inquiry into possible material understatement of U.S. income tax payments, beginning with the fiscal year ended July 31, 1999.
Investors sent shares of Pall plummeting. The stock fell over 15 percent in unusually high volume, to $41.11. On Aug 2, Pall said that its financial statements for the fiscal years 1999 through 2006 should no longer be relied upon. Additionally, Pall said it could owe up to $130 million in back taxes. Shares fell another 3 percent, or $1.21, to $39.90.
Shares of Pall fell $1.17 yesterday, to close at $35.48. The stock is still up 6 percent this year.
The Hartford-based firm Schatz Nobel Izard P.C. said Wednesday it is seeking class-action status in regard to filing a suit against Pall, but that it has not yet filed any suit against the company.
The law firm said in an announcement that Pall has and certain of its officers and directors have "violated federal securities laws."
Pall manufacturers systems that filter impurities out of everything from beer to blood. It is Long Island's seventh-largest company, in terms of revenues, which last year were $2.2 billion.
The company has about 10,828 employees, including 750 on Long Island.
Pall has sold its headquarters building in East Hills to Lowes, the home improvement retailer. Lowes plans to lease the site back to Pall for two or three years while it seeks approval to build a store there. Pall ultimately plans to consolidate its operations at a smaller facility in Port Washington, which it intends to expand.
