PARTY CITY SHAREHOLDER ACTION REMINDER: Securities Litigation Partner James (Josh) Wilson Encourages Investors Who Suffered Losses Exceeding $100,000 In Party City To Contact Him Directly To Discuss Their Options
NEW YORK, Aug. 19, 2023 /PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Party City Holdco Inc. ("Party City" or the "Company") (NYSE: PRTY, OTC: PRTYQ) and reminds investors of the October 2, 2023 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you suffered losses exceeding $100,000 investing in Party City stock or options between November 8, 2022 and June 9, 2023 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310). You may also click here for additional information: www.faruqilaw.com/PRTYQ
There is no cost or obligation to you.
Faruqi & Faruqi is a leading minority and Woman-owned national securities law firm with offices in New York, Pennsylvania, California and Georgia.
As detailed below, the lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) affirmatively misrepresented that its capital resources "will be adequate to meet our liquidity needs for at least the next 12 months"; (2) omitted that there was substantial doubt about Party City's ability to continue as a going concern; (3) downplayed the nature and extent of Party City's then-existing liquidity problems; (4) omitted that Party City's existing credit facilities were insufficient to satisfy its operational needs and that it was unable to obtain additional loans in the normal course of business; and (5) omitted that there was a material weakness in its internal control over financial reporting.
According to the complaint, throughout the Class Period, defendants Bradley Weston and Todd Vogensen made materially false and misleading statements and/or omissions concerning Party City's liquidity position, capital resources, and borrowing capacity.
The truth began to emerge on January 6, 2023, when The Wall Street Journal published a short article stating for the first time that Party City was contemplating filing bankruptcy. The article stated in relevant part: "Party City Holdco Inc. is preparing to file for bankruptcy within weeks, according to people familiar with the matter, after the party-favor retailer's cash dwindled and inflation dampened sales."
Following this news, Party City's stock price declined 50%, from a closing price of $0.358 on January 5, 2023, to a closing price of $0.179 on January 6, 2023.
Then, on January 17, 2023, Party City filed for bankruptcy pursuant to Chapter 11 of the U.S. Bankruptcy Code. The bankruptcy filings reveal that Party City was well aware of its liquidity problems and credit facility shortfall for several months.
Following this news, Party City's stock price declined by 67% over a two-day span from a closing price of $0.374 on January 17, 2023, to a closing price of $0.121 on January 19, 2023.
Finally, on June 9, 2023, Party City filed a Form 8-K with the U.S. Securities and Exchange Commission admitting that: (i) the Q3 2022 10-Q should have included a "going concern" warning; (ii) there was a material weakness in internal control over financial reporting as of the date the Q3 2022 10-Q was filed; and (iii) Party City's independent audit firm Ernst & Young LLP ("E&Y") resigned as the company's audit firm due to a disagreement with Party City management about its treatment of the going concern issue. The Form 8-K noted that the Q3 2022 10-Q contained a "material error," that it "should no longer be relied on," and that it "should be restated."
Following this news, Party City's stock price declined by 22% over the next three trading days from a closing price of $0.046 on June 9, 2023, to $0.036 on June 14, 2023.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Party City's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
Attorney Advertising. The law firm responsible for this advertisement is Faruqi & Faruqi, LLP (www.faruqilaw.com). Prior results do not guarantee or predict a similar outcome with respect to any future matter. We welcome the opportunity to discuss your particular case. All communications will be treated in a confidential manner.
SOURCE Faruqi & Faruqi, LLP
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