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Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 1 of 38 KANTROWITZ, GOLDHAMER & GRAIFMAN, P.C.
Gary Graifman
210 Summit Avenue
Montvale, New Jersey 07645
Tel: 201-391-7000
Fax: 201-307-1086
Liaison Counsel for Lead Plaintiffs
ABBEY GARDY, LLP
Mark C. Gardy
James S. Notis
Orin Kurtz
212 East 39th Street
New York, New York 10016
Tel: 212-889-3700
Fax: 212-684-5191
Lead Counsel for Lead Plaintiffs
CONSOLIDATED CLASS ACTION COMPLAINT
AND JURY TRIAL DEMAND
This is a federal class action on behalf of purchasers of the common stock of Bradley Pharmaceuticals, Inc. (“Bradley” or the “Company”) between October 28, 2004 and February 25, 2005, inclusive (the “Class Period”), against Bradley and certain of its officers and directors for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§78j(b) and 78t(a), and Rule 10b-5, 17 C.F.R. §240.10b 5, promulgated thereunder by the SEC. Defendants violated Section 10(b) and SEC Rule 10b-5 by issuing a press release on October 28, 2004 (the “Third Quarter Press Release”) announcing financial Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 2 of 38 results for the quarter ended September 30, 2004 (the “Third Quarter”) that overstated the Company’s net income for the Third Quarter by over 20% as a result of a $1 million sham transaction approved by defendants. During the Third Quarter, Bradley customers were returning large amounts of Bradley’s AnaMantle HC hemorrhoid therapy back to the Company in anticipation of the arrival of less expensive products comparable to AnaMantle that were going to be offered by generic manufacturers beginning in October Unlike major pharmaceutical companies that focus on the research and development and eventual marketing of proprietary blockbuster drugs, Bradley is a niche pharmaceutical company that specializes in smaller products. Whereas the blockbuster drugs developed through the research and development by major pharmaceutical companies justify the time and cost of achieving patent protection, Bradley's specialty products do not rely on patented technologies. As a result, once Bradley is able to establish a market for a particular product, competitors offering less expensive comparable generic products move in and eliminate Bradley’s market share. Bradley’s business plan is thus dependent on managing the active life cycle of its products. Bradley engages in various sales promotions and instructs its sales force to aggressively push the Company’s products before the generics move in and eliminate demand for the Bradley product. After manufacturers announce the arrival of generic products, demand for the Bradley product plummets and never recovers. With the announced launch of generic versions of AnaMantle set to begin in October 2004, Bradley’s customers began returning their existing inventories of AnaMantle in anticipation of decreased demand for AnaMantle going forward. Weekly Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 3 of 38 internal reports circulated within Bradley during the Third Quarter showed that customer returns of their AnaMantle inventories were offsetting (and reducing) new sales by 30 to In response to the negative impact the AnaMantle product returns would have on Bradley’s financial results for the Third Quarter, defendants engineered a $1 million sham sale of Deconamine Syrup to falsely inflate the Company’s net income for the Third Quarter. Deconamine was a high margin product, such that a $1 million sale could generate net income of over $600,000. However, Deconamine was a largely dormant product with limited sales, and was not one of the products the Company had instructed its sales force to promote. The sale was a sham because, as defendants knew, it was designed solely to boost Third Quarter financials without any expectation that the customer would actually keep the product. The customer and defendants knew that the customer would return the product shortly after the “sale,” and that the payment made by the customer for the “sale” would credited to other, legitimate amounts the customer This is precisely what happened after the close of the Third Quarter. As expected, the customer officially informed Bradley that it was returning the product and Bradley agreed to credit the amount paid for the Deconamine for other amounts the On February 28, 2005, Bradley announced that the Company was notified in December 2004 that SEC had begun an informal inquiry “to determine whether there have been violations of the federal securities laws” and had requested documents and information “with respect to revenue recognition,” among other things. Bradley then Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 4 of 38 announced on April 27, 2005 that its outside auditors had uncovered the sham sale of Deconamine and that Bradley would be forced to restate its financial statements for the Third Quarter announced in the Third Quarter Press Release to unwind the sham transaction. The Company disclosed that the single sham sale had, by itself, inflated Bradley’s Third Quarter net income by over 20%: Third Quarter Net
Overstatement of Third
Third Quarter Net
Income As Restated
Quarter Net Income
Income As Reported
To Unwind the
As a Result of the
On October 28, 2004
Sham Sale
Sham Sale
$3,661,000
$3,047,789
$613,594 or 20.1%
Bradley also announced that the financial statements announced in the Third Quarter Press Release and later repeated in its Quarterly Report on Form 10-Q filed with the SEC on November 9, 2004 (the “Third Quarter 10-Q”) should no longer be relied upon. Bradley has failed to file with the SEC an Annual Report on Form 10-K for 2004, which was due on March 31, 2005, and Bradley has also failed to file its required Annual Proxy Statement or hold its required annual meeting of shareholders. JURISDICTION AND VENUE
The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. §§78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. §240.10b 5. This Court has jurisdiction over the subject matter of this action pursuant to Section 27 of the Exchange Act, 15 U.S.C. §78aa, and 28 U.S.C. §1331. Venue is proper in this Judicial District pursuant to Section 27 of the Exchange Act, 15 U.S.C. §78aa, and 28 U.S.C. §1391(b). Many of the acts and transactions alleged herein, including the preparation and dissemination of materially Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 5 of 38 false and misleading information, occurred in substantial part in this Judicial District. Additionally, the Company maintains its principal executive office in this Judicial In connection with the acts, conduct and other wrongs alleged in this complaint, defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including but not limited to, the United States mails, interstate telephone communications and the facilities of the national securities exchange. THE PARTIES
Plaintiffs Chicago Transit Authority Retirement Fund for Employees, the American Welding Co., Inc. c/o Eric R. Greene, and Edward R. Greene were appointed as lead plaintiffs by the Court on May 27, 2005 and purchased Bradley securities during the Class Period as set forth in their respective Lead Plaintiff Certifications previously filed with the Court, and have been damaged thereby as alleged herein. Defendant Bradley is a pharmaceutical company with principal executive offices located at 383 Route 46 West Fairfield, New Jersey 07004. Bradley was founded by Daniel Glassman in 1985 as a specialty pharmaceutical company marketing to niche physician specialties. Bradley claims that its success is based on the strategy of “Acquire, Enhance and Grow.” Bradley claims to acquire non-strategic brands, enhance these brands with line extensions and improved formulations and grow the products through promotion, advertising and selling activities to optimize life cycle management. Bradley has two operating units: Doak Dermatologics, specializing in topical therapies for dermatology and podiatry, and Kenwood Therapeutics, providing gastroenterology, respiratory and other internal medicine brands. Defendant Bradley has failed to file its Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 6 of 38 2004 Proxy Statement and has also failed to conduct its annual election of directors for the year 2004. Bradley has two classes of stock with unequal voting power: Common Stock and Class B Common Stock. Bradley Common Stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “BDY,” and holders of Bradley Common Stock are entitled to one vote per share. As of March 5, 2004, there were outstanding 15,108,302 shares of Common Stock, $.01 par value. As of March 5, 2004 there were outstanding 429,752 shares of Class B Common Stock, $.01 par value. As long as there are at least 325,000 shares of Class B Common Stock outstanding, holders of that stock vote, as a class, to elect a majority of Bradley’s Board of Directors. In addition, shares of Class B Common Stock are entitled to five votes per share on all other matters to be voted on by stockholders in general. All of the outstanding shares of Class B Common Stock are held by Daniel Glassman, his wife Iris Glassman, and their son, Bradley Glassman. Defendant Daniel Glassman is a founder of the Company and is its Chairman of the Board, President and Chief Executive Officer. Daniel Glassman’s wife, Iris Glassman, is the Company's Treasurer and is also a member of the Company’s Board of Directors. The Company was named after Daniel and Iris Glassman’s son, Bradley Glassman. Daniel Glassman’s salary for the year 2002 was $285,300, with a bonus of $218,810, for a total of $504,110. Daniel Glassman’s salary for the year 2003 was increased to $477,200, with a bonus of $615,400, for a total of $1,092,600. Whereas Daniel Glassman’s compensation in 2001 and 2002 had included significant option grants (amounting to 315,000 shares in 2002), his 2003 compensation was entirely cash. Daniel Glassman and Iris Glassman and one other director, Alan Wolin, comprise the Company’s Compensation Committee. The Company also engages in numerous related party Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 7 of 38 transactions with entities controlled by Daniel and Iris Glassman. For instance, Daniel and Iris Glassman control a limited liability company that leases 32,000 feet of office space to Bradley in Fairfield, New Jersey. Bradley paid $492,000 in rent for the nine months ended September 30, 2004. According to the Company’s 2003 Proxy Statement (the last proxy statement filed by Bradley), Daniel Glassman owns 1,512,443 shares of Bradley Common Stock, an amount equal to 9.9% of the common stock, as well as 392,469 shares of Class B Common Stock, an amount equal to 91.3% of the Class B Common. Daniel Glassman approved and was extensively quoted in the Company’s Third Quarter Press Release announcing Third Quarter financial results, and signed the Company’s Third Quarter 10-Q repeating those financial results, which the Company subsequently stated will be restated to eliminate improperly recorded revenue and should no longer be relied upon. Defendant Bradley Glassman is the Company’s Senior Vice President, Sales and Marketing. Bradley Glassman is the de facto head of Bradley’s Kenwood subsidiary. Bradley Glassman is 31 years old, and is the son of Daniel Glassman and Iris Glassman. Bradley Glassman received his B.A. from Tulane University in 1995 and his M.B.A. from Tulane University in 1996, after which he joined the Company. Bradley Glassman is the second highest paid employee of the Company, after Daniel Glassman. Bradley Glassman’s salary for the year 2002 was $146,200, with a bonus of $56,300, for a total of $202,500. His salary for the year 2003 was $201,700, with a bonus of $158,138, for a total of $359,838. According to Bradley’s 2003 Proxy Statement (the last proxy statement filed by Bradley), Bradley Glassman owns 140,159 common shares of Bradley Common Stock, as well as 20,880 shares of Class B Common Stock, an amount equal to 4.9% of the Class B Common Stock. Bradley Glassman approved the sham Deconamine sale and approved the Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 8 of 38 Company’s Third Quarter Press Release announcing Third Quarter financial results that included the sham Deconamine sale, which financial results the Company subsequently stated will be restated to eliminate improperly recorded revenue and should no longer be Defendant R. Brent Lenczycki has been the Company’s Vice President and Chief Financial Officer since 2001. He is also a Certified Public Accountant. Brent Lenczycki is 33 years old. Brent Lenczycki received his M.B.A. from Tulane University in 1995. Brent Lenczycki worked at the accounting firm of Arthur Andersen, LLP from 1995 to 1998, and joined Bradley in 1998. His 2002 compensation was $146,200, with a bonus of $56,300, for a total of $202,500. His 2003 compensation was $161,800, with a bonus of $114,500, for a total of $276,300. According to the Company’s 2003 Proxy Statement (the last proxy statement filed by Bradley), Brent Lenczycki owns 80,080 shares of Bradley’s Common Stock. Brent Lenczycki’s salary included no stock options for the years 2002 and 2003. Brent Lenczycki prepared the financial statements for the Third Quarter announced in the Third Quarter Press Release and signed the Company’s Third Quarter 10-Q repeating those financial results, which the Company subsequently stated will be restated to eliminate improperly recorded revenue and should no longer be relied upon. Defendants Daniel Glassman, Bradley Glassman and R. Brent Lenczycki are collectively referred to hereinafter as the “Individual Defendants.” During the Class Period, each of the Individual Defendants were senior executive officers of Bradley and were privy to non-public information concerning its business, finances, products, markets and present and future business prospects via internal corporate documents such as weekly sales reports, conversations and connections with other corporate officers and employees, attendance at Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 9 of 38 management and Board of Directors meetings and committees thereof and via reports and other information provided to them in connection therewith. Because of their possession of such information, the Individual Defendants knew or recklessly disregarded the fact that adverse facts specified herein had not been disclosed to, and were being concealed from, the The Individual Defendants had access to the adverse undisclosed information about the Company’s business, operations, operational trends, financial statements, markets and present and future business prospects via access to internal corporate documents (including the Company’s operating plans, budgets and forecasts and reports of actual operations compared thereto), conversations and connections with other corporate officers and employees, attendance at management and Board of Directors meetings and committees thereof and via reports and other information provided to them in It is appropriate to treat the Individual Defendants as a group for pleading purposes and to presume that the false, misleading and incomplete information conveyed in the Company's public filings, press releases and other publications as alleged herein are the collective actions of the narrowly defined group of defendants identified above. Each of the above officers of Bradley directly participated in the management of the Company, was directly involved in the day-to-day operations of the Company and was privy to confidential proprietary information concerning the Company and its business, operations, growth, financial statements, and financial condition, as alleged herein. These defendants were involved in drafting, producing, reviewing and disseminating the false and misleading statements and information alleged herein, were aware, or recklessly disregarded, that the Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 10 of 38 false and misleading statements were being issued regarding the Company, and approved or ratified these statements, in violation of the federal securities laws. As officers and controlling persons of a publicly-held company whose securities were, and are, registered with the SEC pursuant to the Exchange Act, and traded on the NYSE and governed by the provisions of the federal securities laws, the Individual Defendants each had a duty to disseminate promptly, accurate and truthful information with respect to the Company's financial condition and performance, growth, operations, financial statements, business, markets, management, earnings and present and future business prospects, and to correct any previously-issued statements that had become materially misleading or untrue, so that the market price of the Company’s publicly-traded securities would be based upon truthful and accurate information. The Individual Defendants’ misrepresentations and omissions during the Class Period violated these specific The Individual Defendants participated in the drafting, preparation, and approval of the Third Quarter Press Release and Third Quarter 10-Q and were aware of, or recklessly disregarded, the misstatements contained therein and omissions therefrom, and were aware of their materially false and misleading nature. Each of the Individual Defendants had access to the adverse undisclosed information about Bradley’s financial condition and performance as particularized herein and knew (or recklessly disregarded) that these adverse facts rendered the positive representations made by or about Bradley and its business issued or adopted by the Company materially false and misleading. Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 11 of 38 FRAUDULENT SCHEME AND COURSE OF BUSINESS
Each defendant is liable for (i) making false statements, or (ii) failing to disclose adverse facts known to him about Bradley. Defendants’ fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of Bradley common stock was a success, as it: (i) deceived the investing public regarding Bradley’s prospects and business; (ii) artificially inflated the prices of Bradley common stock; (iii) allowed defendants to arrange to sell and actually sell millions of dollars worth of Bradley shares at artificially inflated prices; and (iv) caused plaintiffs and other members of the class to purchase Bradley common stock at artificially inflated prices. Plaintiffs and the class suffered market losses and were damaged as the truth was revealed and the inflation came out of Bradley’s stock price. See ¶¶ 49-56, 64-67. SUBSTANTIVE ALLEGATIONS
Bradley is a tightly controlled company managed by Daniel Glassman and Bradley Glassman and the trusted CFO, Brent Lenczycki. Former Bradley employees have provided information relied upon for allegations in this Complaint, including a marketing manager at the Company’s Kenwood subsidiary and two former sales representatives. The information provided is based on the first-hand knowledge these sources gained through their employment at Bradley at The former marketing manager (the “Marketing Manager”) was a marketing manager at Bradley from August 2004 through February 2005. The Marketing Manager worked for the Kenwood subsidiary (which was headed by Bradley Glassman), with primary responsibility being the marketing of AnaMantle. The Marketing Manager Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 12 of 38 reported to John Knoop (the general manager of Kenwood), who reported to Daniel The Marketing Manager stated that the policy at Kenwood was that Bradley Glassman must personally approve all substantial transactions entered into by the Company. Transactions over $1 million were considered substantial at Kenwood and would not be completed without the prior approval of Bradley Glassman. The first former sales representative (“Sales Representative No. 1”) was a sales representative employed by Bradley from November 2003 to October 2004. The Sales Representative worked for the Kenwood division with sales territory including all of Las Vegas, Northern Nevada, Northern Arizona and Southern Utah. Sales Representative No. 1 reported to two district managers while employed by Bradley, Steve Axelrod and David Baker and also interacted directly with Bradley’s corporate The second former sales representative (“Sales Representative No. 2”) worked for the Doak Dermatologics division of Bradley from June 2003 until January 2005. Sales Representative No. 2 stated that he was required to take certain “key” management personnel on “ride alongs” so they could evaluate his performance in the field. Among those who went on “ride alongs” with Sales Representative No. 2 were The confidential sources cited herein are credible because they had access to the Company in a manner sufficient to provide the information contained in this Complaint. They were employed during the Class Period and had information concerning Bradley’s finances and product sales data. Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 13 of 38 The confidential sources paint a dark picture of Bradley. Defendant Glassman is a micro-manager who is preoccupied with the Company’s stock price. Bradley Glassman is highly unpopular with the employees of Bradley for his role as the spoiled son, and shares Daniel Glassman’s focus on the Company’s stock price. The Marketing Manager confirmed that Bradley employees have regular access to the Company’s financial information in the form of weekly financial reports showing weekly gross and net sales for the Company’s products. Background to Bradley’s Poor Third Quarter Performance
During the quarter ending September 30, 2004, several factors were working together to lower Bradley’s stock price. On June 9, 2004, Bradley announced that it had entered into a definitive agreement to acquire the assets of Bioglan Pharmaceuticals Company, a wholly-owned subsidiary of Quintiles Transnational Corp. (the “Bioglan Purchase”). The Bioglan Purchase closed on August 10, 2004. Bradley paid $183 million for Bioglan – just $1 million less than the total cash listed on its balance sheet for that period, and more than three times the amount paid by Quintiles Transnational for Bioglan in late 2001 and 2002. On September 28, 2004, Bradley secured a $125 million credit facility (the “Credit Facility”) from Wachovia Bank to cover working capital costs after its huge capital expenditure on the Bioglan Purchase. The Credit Facility is comprised of a $75 million term loan and a $50 million revolving line of credit. The Credit Facility is secured by a lien upon substantially all of Bradley’s assets, including its subsidiaries, and is guaranteed by Bradley’s operating subsidiaries. Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 14 of 38 RBC Capital Markets (“RBC”) gave Bradley a Sector Perform rating, with a Risk Qualifier of Above Average in their October 1, 2004 report as a result of the Bioglan Purchase. Under the heading “Paid Too Much?,” RBC wrote that the sale of Bioglan’s assets to Bradley was “[n]ot a bad return on investment for Quintiles, but certainly a premium that raises questions about the rationale Bradley used to justify this price. . . . The product profiles do not appear to justify such a premium.” RBC also noted that Bradley may be experiencing an unwanted buildup in its inventory channel as a result of declining prescriptions, and warned “it appears that Bradley has been recording revenues at a level greater than that of retail sales[.]” At the same time, sales of AnaMantle were dropping more rapidly than anticipated by Bradley in the third quarter 2004. AnaMantle, a hemorrhoid medication introduced by Bradley in 2003, was a major success for Bradley. AnaMantle was sold by Bradley’s Kenwood subsidiary, which was run by Defendant Bradley Glassman. RBC noted that it contributed $3.9 million in revenues to Kenwood’s $18.1 million total The Marketing Manager stated that AnaMantle’s net sales unexpectedly dropped between 30% and 40% during the third quarter 2004 due to competition from generics. This Marketing Manager said that “generic intrusion” was typical at Bradley. Once generics are established in the market, sales of the non-generic product quickly plummet and do not recover to pre-generic levels. This is a typical and expected phenomenon in the pharmaceutical industry. Bradley’s weekly sales reports, provided to the Marketing Manager and Bradley Glassman, showed a significant drop in AnaMantle net sales in the third quarter of 2004, dropping 30% to 40% below the second quarter of Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 15 of 38 2004, due to returns from Bradley’s customers. The Marketing Manager stated that Daniel and Bradley Glassman became “very upset” by AnaMantle’s drop in sales and “panicked because they were very concerned about the stock standing.” Analysts also raised concern about the selling power of Bradley’s three biggest-selling products, which accounted for 99% of Bradley’s revenue in 2004: Adoxa, Solaraze, and Zonalon. Both Raymond James and Wachovia expressed concern that Adoxa, which accounted for 67% of Bradley’s revenue, was in imminent danger of being outsold by generics. In its October 1, 2004 report, RBC expressed concern that Adoxa had no exclusivity or patent protection. Raymond James analyst Michael Krensavage concurred with regard to Adoxa, stating that “Bradley’s challenge is defending its largest-selling drug, the antibiotic Adoxa . . . [which] lacks patent protection[.] Mr. Krensavage also noted that concerns about generic Adoxa “likely are weighing on Bradley shares. They trade at 10.0X estimated 2005 earnings, compared with a peer average of 17.6.” In October 2004, David Maris, an analyst at Banc of America, initiated an unusual “sell” rating on Bradley’s stock “due to what we believe is an operating model that faces challenges given that the company’s product portfolio largely lacks meaningful Although Bradley calls its strategy “Acquire-Enhance-Grow,” RBC analysts Ken Trbovich and Brant Jaouen have described the strategy as one that resembles more a “DESI development strategy.” DESI stands for Drug Efficacy Study Implementation. In 1962, the Food and Drug Administration passed legislation requiring both the safety and efficacy of new drugs to be demonstrated through clinical studies. Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 16 of 38 Prior to 1962, the FDA required only that drugs be tested for safety, which was done by panels of experts. The panel evaluations were reviewed by the FDA under the DESI procedure. Many of the drugs sold under the DESI program are still sold today, although with their slightly changed properties and doses they are not considered FDA approved. However, because the FDA has limited resources for enforcement of the DESI protocol, the agency rarely forces drug companies to cease the manufacture and sale of these The downside to Bradley’s DESI development strategy, according to RBC, is that Bradley’s products “lack substantial differentiation from their competitors and they lack little if any defensible intellectual property.” This means Bradley’s products have a short life as generics quickly move in for successful Bradley products. Once the generics are rolled out, they replace the Bradley products on pharmacists’ shelves and the Bradley products never recover. On July 29, 2004 Bradley announced solid financial results for its second quarter ended June 30, 2004 (the “Second Quarter”), including net income for the Second Quarter of $4.5 million, up $1.1 million, or 33%, compared to the same period in 2003. With respect to AnaMantle, Bradley stated that: The Kenwood Therapeutics division has also achieved significant growth in the gastroenterology and colorectal surgeon market, led by the strong sales and prescription performance of AnaMantle(R) HC, a triple action hemorrhoid treatment in a unique single-use delivery system. AnaMantle(R) HC total prescriptions year to date through June reached 68,600, an increase of 423%.
False And Misleading Statements During the Class Period
Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 17 of 38 On October 28, 2004, Bradley issued the Third Quarter Press Release. Unlike the solid financial results announced for the Second Quarter, Bradley announced net income for the Third Quarter of $3,661,383, down nearly $1.4 million, or 28%, from The net income reported by defendants in the Third Quarter Press Release was false and misleading because $613,594 of the $3,661,383 reported net income was the result of a sham “sale” that was not a sale at all. The Third Quarter Press Release was approved by Daniel Glassman and Bradley Glassman reported (false) financial statements prepared by Brent Lenczycki based on the sham sale of Deconamine approved by Bradley Glassman. Daniel Glassman was also quoted extensively in the Third Quarter Press Release: President and CEO Daniel Glassman, stated, “The Third Quarter 2004
sales reflect the continuing momentum of new product introductions,
including ZODERM® 6.5% Cream, Cleanser and Gel and ROSULA®
NS Medicated Pads, and the continuing success of KERALAC™ . The
ZODERM® and KERALAC™ lines, marketed by the Company’s Doak
Dermatologics subsidiary, represent the strongest launches in Bradley
history. The integration of Bioglan’s operations is proceeding ahead of
schedule. In addition, sales from Bradley’s Kenwood Therapeutics
division have escalated, led by the growth of ANAMANTLE® HC
hemorrhoid therapy. Focused strategic planning and active life cycle
management of the company’s key brands are supported by a strong
marketing team and motivated sales force. Investments into the marketing
and sales areas, including an increase in the sales force, position Bradley
for continued growth.”
On November 9, 2004 Bradley filed with the SEC its Third Quarter 10-Q. Pursuant to the Sarbanes-Oxley Act of 2002, defendants Daniel Glassman and Brent Lenczycki signed and certified Bradley’s financial statements and results of operations of the Company for the Third Quarter, first announced in the Third Quarter Press Release. Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 18 of 38 The statements in the October 28, 2004 press release and the 10-Q filed November 9, 2004 were false and misleading because defendants knew that the financial results falsely included the sham sale of Deconamine to falsely inflate lower net income resulting from increases in product returns of AnaMantle. In the sham transaction, Bradley Glassman approved booking a “sale” for $1,043,907 of Deconamine that did not comply with the Company’s revenue recognition policies. The Deconamine “sold” was quickly returned to Bradley and the amount “paid” for the Deconamine was credited to other (legitimate) amounts owed by the customer. Sales Representative No. 1 confirmed that Deconamine was a “low priority product that was represented only by Bradley’s Medicare and Medicaid Sales Representatives.” The Marketing Manager concurred, stating that Deconamine was a “secondary” product, and that its useful life was over by the Third Quarter as a result of The single Deconamine “sale,” which came out of the Kenwood subsidiary headed by Bradley Glassman, was highly material to Kenwood. The $1,043,907 sham transaction amounted to over 14.2% of Kenwood’s $7,326,418 total sales for the Third Quarter. Moreover, the $613,594 net income generated from the sham transaction falsely transformed a $102,811 net loss at Kenwood for the Third Quarter into $510,783 in net income at Kenwood for the Third Quarter. The impact of the sham transaction was likewise significant on a company-wide basis, as it falsely inflated Bradley’s total net income for the Third Quarter by over 20.1%. The Third Quarter 10-Q’s attempt to benignly characterize the sham transaction was likewise false and misleading. The Third Quarter 10-Q stated that stated Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 19 of 38 that the “increase in DECONAMINE® products was primarily due to an increase in wholesaler buying patterns.” This was untrue because the sham transaction was a single transaction involving a single wholesaler and did not constitute a pattern. The SEC Inquiry and Subsequent Disclosure of the Restatement
In December 2004, Bradley was notified by the SEC that the SEC was conducting an informal inquiry “to determine whether there have been violations of the federal securities laws” and had requested documents and information “with respect to revenue recognition,” among other things. Bradley did not publicly disclose the SEC inquiry at the time. Instead, Bradley sought to condition the market to lower financial results from Bradley and lower sales of AnaMantle by issuing a press release on January 12, 2005 to announce lower guidance for estimated net sales and earnings per share for the year 2005. The press The Management Team now estimates Net Sales of $173 million and
Earnings Per Diluted Share of $1.63 for 2005, as opposed to prior
guidance of Net Sales of $190 million and Earnings Per Diluted Share of
$1.90 for the year. This adjusted guidance is the result of faster than
expected market erosion of AnaMantle HC® hemorrhoid therapy due to
recently introduced comparable products and earlier than anticipated
competition for KERALAC™ Nail Gel and KERALAC™ Lotion.
However, Bradley did not publicly disclose the SEC inquiry until over two months after it received notice from the SEC. Instead, Bradley announced prior to the opening of trading on February 28, 2005, and only after the SEC had sent a second letter to Bradley regarding the inquiry. Bradley also disclosed that it would not be announcing its 2004 earnings as previously planned. Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 20 of 38 Shares of Bradley fell $3.50 per share, or 26.4%, to close at $9.75 per share on unusually high trading volume on February 28, 2005 (2,709,800 shares traded compared to a Class Period daily average of 367,961). Bradley’s stock was a leading decliner on the Bank of America analyst David Maris noted that “[I]t is unclear why the company did not announce this news” in December when it first received notice. On March 11, 2005, Bradley issued a press release to announce that it was “withdrawing its previously announced financial guidance.” On March 16, 2005, Bradley issued a press release to announce that the Chairman of its Audit Committee, director Michael Bernstein, had resigned from the On April 27, 2005, Bradley provided further detail of the revenue recognition issues at the Company by issuing a press release announcing the expected restatement of the financial statements announced in the Third Quarter Press Release and filed with the SEC in the Third Quarter 10-Q. The press release stated that the Company had been formally notified by its outside auditor, Grant Thornton LLP, that the sham sale of Deconamine “did not meet the criteria for revenue recognition” and that the financial statements announced in the Third Quarter Press Release and filed with the SEC in the Third Quarter 10-Q would have to be restated to unwind the sham transaction: As a result of the non-recognition of revenue in the third quarter from this
sale, the Company's consolidated statement of income for the third
quarter of 2004 will need to be adjusted and restated to reduce net sales
by $1,043,907 to $27,452,698, net income by $613,594 to $3,047,789,
and diluted net income per common share by $0.03 to $0.18 and the
Company's consolidated balance sheet as of September 30, 2004 will need
to be adjusted and restated to record $1,043,907 of deferred revenue. The
Company does not anticipate filing an amended Quarterly Report on Form
Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 21 of 38 10-Q for the third quarter ended September 30, 2004 containing restated
financial statements until completion of the audit of the Company's
financial statements for the year ended December 31, 2004. Until such
filing, investors should not rely upon the financial statements included
in the Company's Form 10-Q for the third quarter currently on file with
the Securities and Exchange Commission. (Emphasis added.)
To date, Bradley still has not filed its Annual Report on Form 10-K for 2004. Grant Thornton LLP, has been reviewing the Company’s transactions and internal controls since at least February 2005 and has not yet completed its work. Bradley has also failed to file its Annual Proxy Statement or conduct its annual shareholder meeting. In its Current Report on Form 8-K filed on April 28, 2005, Bradley reported that (i) it had received a notice from a beneficial holder of the Company’s 4% Convertible Senior Subordinated Notes due 2013 (the “Convertible Notes”) claiming a default under the related indenture (the “Indenture”) as a result of the Company’s failure to file its Annual Report on Form 10-K; and (ii) such a default, if not cured within 30 days after receipt of that notice, would constitute an event of default entitling the trustee or note holders to accelerate maturity of the Convertible Notes, which have an aggregate principal amount of $37 On June 1, 2005, the Company received a subsequent notice from that beneficial noteholder advising that the Company’s failure to cure such default now constituted an event of default under the Indenture and declaring the principal of the Convertible Notes and interest thereon to be due and payable. PROXIMATE LOSS CAUSATION/ECONOMIC LOSS
The market for Bradley’s securities was open, well-developed and efficient at all relevant times. As a result of these materially false and misleading statements and failures to disclose, Bradley’s securities traded at artificially inflated prices during the Class Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 22 of 38 Period. Plaintiffs and other members of the Class purchased or otherwise acquired Bradley securities relying upon the integrity of the market price of Bradley’s securities and market information relating to Bradley, and have been damaged thereby. 65. For much of the year preceding Bradley’s February 28, 2005 announcement of the informal SEC investigation, Bradley’s stock traded in the mid-$20 range. By the beginning of the Class Period, Bradley stock was trading in the mid to upper teens. The stock price fell below $16 only twice during the Class Period – on October 28, 2004 and from January 3-7, 2005 – before defendants began to condition the market with its revised guidance after it had notice of, yet did not disclose, the SEC investigation. The false and misleading statements in the Third Quarter Press Release and later the Third Quarter 10-Q inflated Bradley’s stock price by $3.50 per share. On February 28, 2005, Bradley stock fell $3.50 per share in reaction to the SEC inquiry regarding improper revenue recognition at the Company. During the Class Period, defendants materially misled the investing public, thereby inflating the price of Bradley's securities, by publicly issuing false and misleading statements and omitting to disclose material facts necessary to make defendants' statements, as set forth herein, not false and misleading. These statements and omissions were materially false and misleading in that they failed to disclose material adverse information and misrepresented the truth about the Company, its business and At all relevant times, the material misrepresentations and omissions particularized in this Complaint directly or proximately caused or were a substantial contributing cause of the damages sustained by plaintiffs and other members of the Class. Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 23 of 38 As described herein, during the Class Period, defendants made or caused to be made a series of materially false or misleading statements about Bradley’s business, prospects and operations. These material misstatements and omissions had the cause and effect of creating in the market an unrealistically positive assessment of Bradley and its business, prospects and operations, thus causing the Company’s securities to be overvalued and artificially inflated at all relevant times. Defendants’ materially false and misleading statements during the Class Period resulted in plaintiffs and other members of the Class purchasing the Company's securities at artificially inflated prices, thus causing the NO SAFE HARBOR
The statutory safe harbor provided for forward-looking statements under certain circumstances does not apply to any of the allegedly false statements pleaded in this complaint. The specific statements identified herein were not forward looking, but related to historical facts for closed quarterly periods. Alternatively, to the extent that the statutory safe harbor does apply to any forward-looking statements pleaded herein, defendants are liable for those false forward-looking statements because at the time each of those forward- looking statements was made, the particular speaker knew that the particular forward- looking statement was false, and/or the forward-looking statement was authorized and/or approved by an executive officer of Bradley who knew that those statements were false PLAINTIFF'S CLASS ACTION ALLEGATIONS
Plaintiffs bring this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 24 of 38 purchased or otherwise acquired the securities of Bradley between October 28, 2004 and February 25, 2005, inclusive (the “Class Period”) and who were damaged thereby. Excluded from the Class are all defendants, all officers and/or directors of Bradley during the Class Period, at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns and any entity in which defendants have The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, Bradley had over 15 million common shares were actively traded on the NYSE. The exact number of Class members can be ascertained through appropriate discovery. Record owners and other members of the Class may be identified from records maintained by Bradley or its transfer agent and may be notified of the pendency of this action by mail, using the form of notice similar to that customarily used in securities class actions. Plaintiff's claims are typical of the claims of the members of the Class as all members of the Class are similarly affected by defendants’ wrongful conduct in violation of federal law that is complained of herein. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are: whether the federal securities laws were violated by defendants’ Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 25 of 38 whether statements made by defendants to the investing public during the Class Period misrepresented material facts about the business, operations and to what extent the members of the Class have sustained damages A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action. APPLICABILITY OF PRESUMPTION OF RELIANCE:
FRAUD-ON-THE-MARKET DOCTRINE
At all relevant times, the market for Bradley securities was an efficient market for the following reasons, among others: Bradley stock met the requirements for listing, and was listed and actively traded on the NYSE, a highly efficient and automated market; As a regulated issuer, Bradley filed periodic public reports with the Bradley regularly communicated with public investors via established market communication mechanisms, including through regular disseminations of press releases on the national circuits of major newswire services and through other wide- ranging public disclosures, such as communications with the financial press and other Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 26 of 38 Bradley was followed by several securities analysts employed by major brokerage firms who wrote reports, including RBC Capital Markets, Bank of America and Wachovia Securities, which were distributed to the sales force and certain customers of their respective brokerage firms during the Class Period; and releases on the PR Newswire press service. As a result of the foregoing, the market for Bradley securities promptly digested current information regarding Bradley from all publicly available sources and reflected such information in Bradley stock price. Under these circumstances, all purchasers of Bradley securities during the Class Period suffered similar injury through their purchase of Bradley securities at artificially inflated prices and a presumption of reliance applies. During the Class Period, as detailed herein, defendants misled the public regarding Bradley’s revenue by failing to disclose the Sham Transaction and by failing to disclose a 30% to 40% drop in sales of one of its fastest-growing products, AnaMantle. Defendants’ scheme to deceive investors and the market artificially inflated and maintained Bradley’s stock price, as alleged in ¶¶ 49-56, 64-67 operated as a fraud and deceit on Class Period purchasers of Bradley stock. Plaintiffs and the Class suffered actual economic loss and were damaged when the sham Deconamine transaction, which was concealed by defendants’ misrepresentations and omissions was disclosed to the market causing inflation to be removed from Bradley’s stock price. On February 28, 2005 – the first day of trading after defendants announced the SEC investigation concerning the sham Deconamine transaction, Bradley’s stock fell precipitously – more than 26% – as the prior artificial inflation came out of Bradley’s stock price. The 26% decline in Bradley’s stock price at the end of the Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 27 of 38 Class Period was a direct result of the revelation to the market and investors of the nature and extent of the Deconamine transaction that had been concealed by defendants’ prior misstatements and fraudulent conduct. Moreover, had defendants disclosed the informal investigation by the SEC in December when they first received notice, the stock price would have dropped in the same manner as it did after the February 28, 2005 announcement of the investigation. Thus, as a result of their purchases of Bradley stock at artificially inflated and maintained prices during the Class Period, plaintiffs and other members of the class suffered economic loss, i.e., damages, under the federal securities Violation Of Section 10(b) of the Exchange Act
And SEC Rule 10b-5 Against All Defendants
Plaintiffs repeat and reallege each and every allegation contained above as if During the Class Period, defendants carried out a plan, scheme and course of conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing public, including plaintiffs and other Class members, as alleged herein; and (ii) cause plaintiffs and other members of the Class to purchase Bradley securities at artificially inflated prices. In furtherance of this unlawful scheme, plan and course of conduct, defendants, and each of them, took the actions set forth herein. employed devices, schemes, and artifices to defraud; (b) made untrue statements of material fact and/or omitted to state material facts necessary to make the statements not misleading; and (c) engaged in acts, practices, and a course of business which operated as a fraud and deceit upon the purchasers of the Company's Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 28 of 38 securities in an effort to maintain artificially high market prices for Bradley securities in violation of Section 10(b) of the Exchange Act and SEC Rule 10b-5. All defendants are sued either as primary participants in the wrongful and illegal conduct charged herein or as Defendants, individually and in concert, directly and indirectly, by the use, means or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a continuous course of conduct to conceal adverse material information about the business, operations and future prospects of Bradley as specified herein. These defendants employed devices, schemes and artifices to defraud, while in possession of material adverse non-public information and engaged in acts, practices, and a course of conduct as alleged herein in an effort to assure investors of Bradley value and performance and continued substantial growth, which included the making of, or the participation in the making of untrue statements of material facts and omitting to state material facts necessary in order to make the statements made about Bradley and its business operations and future prospects in the light of the circumstances under which they were made, not misleading, as set forth more particularly herein, and engaged in transactions, practices and a course of business which operated as a fraud and deceit upon the purchasers of Bradley securities during the Class Period. Each of the Individual Defendants' primary liability, and controlling person liability, arises from the following facts: (i) the Individual Defendants were high-level executives and/or directors at the Company during the Class Period and members of the Company's management team or had control thereof; (ii) each of these defendants, by virtue of his responsibilities and activities as a senior officer and/or director of the Company was Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 29 of 38 privy to and participated in the creation, development and reporting of the Company's internal budgets, plans, projections and/or reports; (iii) each of these defendants enjoyed significant personal contact and familiarity with the other defendants and was advised of and had access to other members of the Company’s management team, internal reports and other data and information about the Company’s finances, operations, and sales at all relevant times; and (iv) each of these defendants was aware of the Company's dissemination of information to the investing public which they knew or recklessly disregarded was Defendants had actual knowledge of the misrepresentations and omissions of material facts set forth herein, or acted with reckless disregard for the truth in that they failed to ascertain and to disclose such facts, even though such facts were available to them. Defendants’ material misrepresentations and/or omissions were done knowingly or recklessly and for the purpose and effect of concealing Bradley operating condition and future business prospects from the investing public and supporting the artificially inflated price of its securities. As demonstrated by defendants' overstatements and misstatements of the Company's business, operations and earnings throughout the Class Period, defendants, if they did not have actual knowledge of the misrepresentations and omissions alleged, were reckless in failing to obtain such knowledge by deliberately refraining from taking those steps necessary to discover whether those statements were false or misleading. As a result of the dissemination of the materially false and misleading information and failure to disclose material facts, as set forth above, the market price of Bradley securities was artificially inflated during the Class Period. In ignorance of the fact that market prices of Bradley publicly-traded securities were artificially inflated, and relying Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 30 of 38 directly or indirectly on the false and misleading statements made by defendants, or upon the integrity of the market in which the securities trades, and/or on the absence of material adverse information that was known to or recklessly disregarded by defendants but not disclosed in public statements by defendants during the Class Period, plaintiffs and the other members of the Class acquired Bradley securities during the Class Period at artificially high At the time of these misrepresentations and omissions, plaintiffs and other members of the Class were ignorant of their falsity, and believed them to be true. Had plaintiffs and the other members of the Class and the marketplace known the truth regarding the problems that Bradley was experiencing, which were not disclosed by defendants, plaintiffs and other members of the Class would not have purchased or otherwise acquired their Bradley securities, or, if they had acquired such securities during the Class Period, they would not have done so at the artificially inflated prices which they paid. By virtue of the foregoing, defendants have violated Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder. As a direct and proximate result of defendants' wrongful conduct, plaintiffs and the other members of the Class suffered damages in connection with their respective purchases and sales of the Company's securities during the Class Period. Violation of Section 20(a) of the Exchange Act
Against the Individual Defendants
Plaintiffs repeat and reallege each and every allegation contained above as if Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 31 of 38 The Individual Defendants acted as controlling persons of Bradley within the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high- level positions, and their ownership and contractual rights, participation in and/or awareness of the Company's operations and/or intimate knowledge of the false financial statements filed by the Company with the SEC and disseminated to the investing public, the Individual Defendants had the power to influence and control and did influence and control, directly or indirectly, the decision making of the Company, including the content and dissemination of the various statements alleged to be false and misleading. The Individual Defendants were provided with or had unlimited access to copies of the Company's reports, press releases, public filings and other statements alleged to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or In particular, each of these defendants had direct and supervisory involvement in the day-to-day operations of the Company and, therefore, is presumed to have had the power to control or influence the particular transactions giving rise to the securities violations as alleged herein, and exercised the same. As set forth above, Bradley and the Individual Defendants each violated Section 10(b) and Rule 10b-5 by their acts and omissions as alleged in this Complaint. By virtue of their positions as controlling persons, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate result of defendants' wrongful conduct, plaintiffs and other members of the Class suffered damages in connection with their purchases of the Company’s securities during the Class Period. Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 32 of 38 WHEREFORE, plaintiffs pray for relief and judgment, as follows: Determining that this action is a proper class action and certifying plaintiffs as the class representatives under Rule 23 of the Federal Rules of Civil Procedure and their counsel as counsel for the Class; Awarding compensatory damages in favor of plaintiffs and the other Class members against all defendants, jointly and severally, for all damages sustained as a result of defendants’ wrongdoing, in an amount to be proven at trial, including interest Awarding plaintiffs and the Class their reasonable costs and expenses incurred in this action, including counsel fees and expert fees; and Such other and further relief as the Court may deem just and proper. JURY TRIAL DEMANDED
Plaintiffs hereby demand a trial by jury. KANTROWITZ, GOLDHAMER &
GRAIFMAN, P.C.
By:
210 Summit Avenue Montvale, New Jersey 07645 Tel: 201- 391-7000 Fax: 201-307-1086 Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 33 of 38 ABBEY GARDY, LLP
Mark C. Gardy
James S. Notis
Orin Kurtz
212 East 39th Street
New York, New York 10016
Tel: 212-889-3700
Fax: 212-684-5191
Daniel E. Bacine
Leslie Bornstein Molder
BARRACK, RODOS & BACINE
3300 Two Commerce Square
2001 Market Street
Philadelphia, Pennsylvania 19103
Tel: 215-963-0600
Fax: 215-963-0838
Robert A. Hoffman
BARRACK, RODOS & BACINE
14 Kings Highway West, 3rd Floor
Haddonfield, New Jersey 08033
Tel: 856-354-0707
Fax: 856-354-9404
Sherrie R. Savett
Douglas M. Risen
Kimberly Walker
BERGER & MONTAGUE, P.C.
1622 Locust Street
Philadelphia, Pennsylvania 19103
Tel: 215-875-3000
Fax: 215-875-4636
Evan J. Smith
BRODSKY & SMITH, LLC
20 Brace Road, Suite 112
Cherry Hill, New Jersey 08034
Tel: 601-667-6200
Fax: 601-667-9029
Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 34 of 38 Lauren Antonino
CHITWOOD & HARLEY, LLP
1230 Peachtree Street, Suite 2300
Atlanta, Georgia 30309
Tel: 404-607-6888
Fax: 404-876-4476

Peter S. Pearlman
COHN, LIFLAND, PEARLMAN,
HERRMANN & KNOPF, LLP
Park 80 Plaza West One
Saddle Brook, New Jersey 07663
Tel: 201-845-9600
Fax: 201-845-9423
Andrew R. Jacobs
EPSTEIN, FITZSIMMONS, BROWN,
GIOIA, JACOBS & SPROULS, P.C
245 Green Village Road
P.O. Box 901
Chatham Township, New Jersey 07928
Tel: 973-593-4900
Fax: 973-593-0179
Frederic S. Fox
Joel B. Strauss
Donald R. Hall
Jeffrey P. Campisi
KAPLAN FOX & KILSHEIMER, LLP
805 Third Avenue, 22nd Floor
New York, New York 10022
Tel: 212-687-1980
Fax: 212-687-7714
Samuel H. Rudman
David A. Rosenfeld
Mario Alba, Jr.
LERACH COUGHLIN STOIA GELLER
RUDMAN & ROBBINS, LLP
200 Broadhollow Road, Suite 406
Melville, New York 11747
Tel: 631-367-7100
Fax: 631-367-1173
Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 35 of 38 Joseph J. Depalma
Katrina Blumenkrants
LITE, DEPALMA, GREENBERG &
RIVAS, LLC
Two Gateway Center, 12th Floor
Newark, New Jersey 07102
Tel: 973-623-3000
Fax: 973-623-0858
Steven G. Shulman
Peter E. Seidman
Andrei V. Rado
MILBERG WEISS BERSHAD &
SHULMAN, LLP
One Pennsylvania Plaza
New York, New York 10119-0165
Tel: 212-594-5300
Fax: 212-868-1229
Bruce G. Murphy
LAW OFFICES OF BRUCE G.
MURPHY
265 Lloyds Lane
Vero Beach, Florida 32963
Tel: 772-231-4202
Fax: 561-231-4042
Laurence D. Paskowitz
PASKOWITZ & ASSOCIATES
60 East 42nd Street, Suite 4600
New York, New York 10165
Tel: 212-685-0969
Fax: 212-682-3544
William J. Pinilis
PINILIS HALPERN, LLP
237 South Street
Morristown, New Jersey 07960
Tel: 973-656-0222
Fax: 973-401-1114
Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 36 of 38 Charles J. Piven
LAW OFFICES OF CHARLES
PIVEN, P.A.
The World Trade Center – Baltimore
401 East Pratt Street, Suite 2525
Baltimore, Maryland 21202
Tel: 410-332-0030
Fax: 410-685-1300
Patrick V. Dahlstrom
Teresa L. Webb
POMERANTZ HAUDEK BLOCK
GROSSMAN & GROSS LLP
100 Park Avenue
New York, New York 10017
Tel: 312-377-1181
Fax: 312-377-1184
Marc A. Topaz
Richard A. Maniskas
SCHIFFRIN & BARROWAY, LLP
280 King of Prussia Road
Radnor, Pennsylvania 19087
Tel: 610-667-7706
Fax: 610-667-7056
David R. Scott
Neil Rothstein
Erin G. Comite
SCOTT & SCOTT, LLC
108 Norwich Avenue
Colchester, Connecticut 06415
Tel: 860-537-3818
Fax: 860-537-4432
Arthur L. Shingler, III
SCOTT & SCOTT, LLC
401 B Street, Suite 307
San Diego, California 92101
Tel: 619-233-4565
Fax: 619-233-0508
Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 37 of 38 Christopher A. Seeger
Roopal P. Luhana
SEEGER WEISS, LLP
550 Broad Street, Suit 920
Newark, New Jersey 07102-4573
Tel: 973-639-9100
Fax: 973-639-9393
Stephen A. Weiss
Erick T. Chaffin
SEEGER WEISS, LLP
One William Street
New York, New York 10004
Tel: 212-584-0700
Fax: 212-584-0799
Patrick L. Rocco
SHALOV STONE & BONNER, LLP
163 Madison Avenue, P.O. Box 1277
Morristown, New Jersey 07962
Tel: 973-775-8997
Fax: 973-775-8777
Aaron Brody
STULL, STULL & BRODY
6 East 45th Street
New York, New York 10017
Tel: 212-687-7230
Fax: 212-490-2022
Joseph H. Weiss
WEISS & LURIE
551 Fifth Avenue
New York, New York 10176
Tel: 212-682-3025
Fax: 212-682-3010
Case 2:05-cv-01219-PGS-ES Document 50 Filed 06/20/2005 Page 38 of 38 Gregory M. Nespole
Christopher S. Hinton
WOLF HALDENSTEIN ADLER
FREEMAN & HERZ, LLP
270 Madison Avenue New York, New York 10016 Tel: 212-545-4600 Fax: 212-545-4653 Counsel for Plaintiffs

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