Stockholders v American Physicians Capital, Inc.
American Physicians Capital Investors Cry Foul Over Company’s $43 Million Loss After Restatement
Several class actions have been filed against liability insurer American Physicians Capital, Inc. (Nasdaq:ACAP) and certain of its officers and directors by stockholders who purchased the company's common stock between February 13, 2003, and November 6, 2003. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.
On November 6, 2003, AP Capital shocked the market when in announced that it would delay reporting its results until November 12 and that it expected to report a pre-tax net loss of $43 million because of significant adjustments in reserves for policy losses. Due to the losses, the company also stated that it would not be able to benefit from a deferred tax asset from accumulated operating losses and would take a charge of $50 million for a valuation allowance to eliminate the deferred tax asset. The market reacted predictably to the news. On November 6, AP Capital stock fell 37%, or $10.34 per share, to close at $17.41 per share on extremely high trading volume.
If you purchased American Physicians Capital stock during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by March 3, 2004. 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 your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.
