From Detroit Free Press
VAN BUREN TOWNSHIP, MI — At least four law firms have filed suits against Visteon Corp. in U.S. District Court seeking class-action status on behalf of investors, alleging that poor management or accounting errors misrepresented the company’s financial health and inflated its value.
The firms seek a lead plaintiff and others who bought the company’s stock or bonds between Jan. 23, 2004, and Jan 31, 2005.
On Jan. 31, Visteon acknowledged in a filing with the federal Securities and Exchange Commission that it had found accounting errors related to pensions, retiree health care and taxes. The company and its accounting firm, PricewaterhouseCoopers LLP, are reviewing financial statements from 2002-04 for possible revisions.
Seizing on those revelations and the stock’s declines, the law firms filed shareholder suits, a fairly common practice employed against other struggling companies.
Schatz & Nobel P.C. of Hartford, Conn., says that, due to the accounting errors, “Visteon’s financial results were in violation of generally accepted accounting principles and were materially inflated at all relevant times.”
Philadelphia-based Goldman Scarlato & Karon PC alleges that Visteon and several top executives didn’t tell shareholders that it was making unprofitable products, relied too much on sales to Ford Motor Co. and failed to control costs.
The Goldman suit names the company as a defendant, as well as five executives: Chairman Peter Pestillo; President and CEO Michael Johnston; Glenda Minor, the controller for Europe and South America; Daniel Coulson, the former CFO and James Palmer, the current CFO.
Schiffrin & Barroway LLP of Radnor, Pa., filed a similar suit Friday.
Brodsky & Smith LLC of Bala Cynwyd, Pa., filed suit Monday, seeking purchasers of common stock, alleging “a series of material misrepresentations to the market” that inflated the share price.
Visteon shares fell 8 cents, or 1.2 percent, to $6.71 on Monday.
The company did not have a comment on the lawsuits filed in the Eastern District of Michigan.
Separately, Ford, which bought $13 billion worth of parts from Visteon last year, is implementing a software package from Vivecon Corp. designed to help the automaker manage risks to its supply chain.
Ford did not return a call seeking comment on Vivecon’s announcement.
Copyright 2005 Detroit Free Press. All Rights Reserved.
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