AgFeed Industries, Inc. Long Term Investors File Lawsuit Against Directors

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Company Name(s): 
AgFeed Industries
Case Name: 
AgFeed Industries Shareholder Derivative Action 11/10/2011
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: FEED
Lawsuit Overview
Type of Lawsuit: 
Shareholder Derivative Action
Date Filed: 
11/10/2011
Summary: 

San Diego, Nov. 10, 2011 (Shareholders Foundation) -- An investor in shares of AgFeed Industries, Inc. (NASDAQ:FEED) filed a lawsuit against directors of AgFeed Industries over alleged breaches of fiduciary duties.

The lawsuit by a current investor in Agfeed Industries shares against the board of directors over alleged breaches of fiduciary duties follows an earlier lawsuit filed for investors who purchased their NASDAQ: FEED shares only between March 16, 2009 and August 2, 2011. According to that complaint the plaintiff alleges that AgFeed Industries, Inc violated the Securities Exchange Act of 1934 by issuing a series of allegedly materially false and misleading statements to investors about its financial health that were designed to deceive the market and cause shares of AgFeed to trade at artificially high prices.

On August 2, 2011 AgFeed Industries announced its preliminary results for the second quarter of 2011. Among other things, the Company said it expects for the second quarter of 2011to report revenues of approximately $84.0 million and a net loss of approximately $17 million for the three months ended June 30, 2011. AgFeed Industries also announced that due to "operating pressures," AgFeed Industries would be "establishing reserves due to concerns regarding credit quality."

NASDAQ:FEED fell from as high as $1.99 on August 1, 2011 to as low as $0.40 per share on October 3, 2011.