NEW YORK — The stock price of Liz Claiborne Inc., which closed Tuesday at 24 3/4, down 5/8, is a key issue in a class action suit filed by disgruntled holders in Brooklyn Federal Court.

The suit, filed on behalf of those who purchased Claiborne stock between Sept. 21, 1992 and July 16, 1993, charges the company and its officers with giving “false representations” and “false financial statements” concerning the company’s internal operations. The suit seeks unspecified compensatory damages.

The company and its officers made the allegedly false representations, the complaint charges, so they could sell their own holdings at “artificially high prices and to reap millions of dollars of profits before the truth about Liz Claiborne’s business and prospects became known.”

As Claiborne earnings dropped, the price of its stock, which had been trading on the New York Stock Exchange in the $35-to-$40 range as late as April 1993, fell to a low of $22.25 in mid-July 1993.

The company has yet to file an answer in court to the suit, which was filed in March but came to light in an article in this week’s New York magazine. A Claiborne spokeswoman said Tuesday that this suit is “without merit and will be litigated.”

Liz Claiborne Inc., Jerome Chazen, chairman and chief executive officer, and Harvey L. Falk, vice chairman and president, are among those named in the action.

The suit also charges Chazen and other senior officers with selling a large portion of their Claiborne stock holdings during the period cited. For example, Chazen is charged with selling 200,000 shares for $7.7 million, while Falk allegedly netted $1.7 million from the sale of 40,000 shares of Claiborne stock.

Regarding Claiborne’s disappointing 1992 sales and earnings, which the company attributed to its prudent management of inventories, the suit claims that the real reason for the slowdown was “decreasing customer appeal of [Liz Claiborne] products.”

The suit says that by early 1993 inventories had reached “excessive levels (especially of denim products and goods in Liz Claiborne’s Men’s, Misses and Petite divisions),” which would eventually hurt the company’s profitability in 1993.

Concerning Claiborne’s stock buybacks in May 1992, the suit claims the purchases were made not because the company thought the stock was undervalued but to “provide artificial support for the market price of the stock.”

At the time, Claiborne said the stock repurchase plan was being implemented because the stock was undervalued.

The suit also claims that Claiborne’s results for the first quarter of 1993 were “falsified” because the company failed to take necessary writedowns, as required by the Securities & Exchange Commission.

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