CP Ships, Ltd. Cohen Milstein Hausfeld & Toll, P.L.L.C. represents lead plaintiffs as lead counsel in a lawsuit alleging violations of federal securities laws that was filed on behalf of a proposed class of all investors who purchased CP Ships stock from January 29, 2003 through August 9, 2004. The suit was initially filed in 2004 in the U.S. District Court for the Middle District of Florida. CP Ships was a containerized shipping services company whose stock was traded on the New York and Toronto stock exchanges. It was purchased in late 2005 by the parent of Hapag-Lloyd, TUI A.G., a German tourism and shipping company, and its stock is no longer publicly traded. On August 9, 2004 the Company revealed that it had artificially inflated net income for the previous nine quarters (all of 2002 and 2003 and the first quarter of 2004) due to a massive underaccrual of costs. The Company further revealed that it would need to reduce net income for these periods a total of approximately $35 million to $40 million for the nine quarters. On this news the Company’s stock fell $3.70 per share on August 9, 2004, or 22.4%, to close at $12.85 on the New York Stock Exchange. The price of CP Ships shares also fell approximately 21.5% on the Toronto stock exchange. The suit charges that CP Ships and three of its officers, Raymond Miles, Frank Halliwell, and Ian Webber, significantly underaccrued certain costs, thus falsely inflating CP’s net income, issued financial statements that violated Generally Accepted Accounting Principles (“GAAP”), and that, as a result of this misconduct, CP Ships’ financial statements were materially false or misleading at all times during the class period. The complaint also charges that certain executives engaged in insider trading when they knew the company would need to restate its financial results but had not yet disclosed this to the market. Most significantly, Raymond Miles, the Chairman of CP Ships, sold CP Ships stock for a profit of almost $4 million before the August 9, 2004 announcement that the Company’s financial statements would need to be restated going back to 2002. In April 2007, the district court dismissed the case because, according to the court, the plaintiffs had not adequately shown that the defendants had acted with scienter, or an improper motive. Lead plaintiffs have appealed the district court’s decision to the United States Circuit Court of Appeals for the Eleventh Circuit. |
