SAN DIEGO, Aug 31, 2011 (BUSINESS WIRE) -- Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at AgFeed Industries, Inc. /quotes/zigman/103949/quotes/nls/feed FEED -6.73% . AgFeed, through its subsidiaries, is an international agribusiness that engages in animal nutrition and commercial hog producing for use in pork production and commercial hog breeding markets. The company was founded in 1995, and is headquartered in Grand Junction, Colorado.
Robbins Umeda LLP is investigating whether officers and directors of AgFeed issued materially false and misleading statements to investors that were designed to deceive the market and artificially inflate the company's value. In particular, the firm is examining allegations that Chairman and Chief Executive Officer John Stadler, along with other officials at the company, misled investors about the condition and future business prospects of AgFeed. On August 2, 2011, AgFeed announced disappointing financial results for the second quarter of fiscal year 2011 that showed the company was performing well below expectations. According to the company's press release, AgFeed incurred a $17 million net loss for the quarter related to huge accounts receivable expenses in China and other bad debt expenses. Additionally, AgFeed revealed that due to "operating pressures" and "concerns regarding credit quality," officials at the company would be aggressively establishing reserves at AgFeed.
Since this news has emerged, shares of AgFeed have lost over 40% of their value. On August 29, 2011, after trading as high as $2.05 on August 2, 2011, shares of the company's stock closed at just $1.05 per share.
One option available to investors is filing a class action lawsuit on behalf of AgFeed investors to recover damages incurred as a result of the wrongdoing. If you purchased stock in AgFeed and would like more information about your shareholder rights, please contact attorney Gregory E. Del Gaizo at 800-350-6003 or via the shareholder information form on our website.
Robbins Umeda LLP represents individual and institutional shareholders in derivative, direct, and class action lawsuits. The law firm's skilled litigation teams include former federal prosecutors, former defense counsel from top multinational corporate law firms, and career shareholder rights attorneys. For more information, please go to http://www.robbinsumeda.com