3 MORE SHAREHOLDER SUITS FILED AGAINST DONNKENNY
Byline: Vicki M. Young
NEW YORK — Three additional shareholder suits have been filed in Manhattan federal court against Donnkenny Inc., including one by a limited partnership that said it lost over $5 million as a result of Donnkenny’s allegedly misleading public statements.
Emanon Partners filed suit on behalf of purchasers of securities and sellers of puts in Donnkenny stock from Feb. 14, 1995, through Nov. 15, 1996.
The suit charges the firm and three executives with securities fraud based on misrepresentation and/or omission of material information concerning Donnkenny’s operating condition and financial results. It stated that the representations “led securities analysts following the company and investors to believe that Donnkenny had achieved a historical 30 percent growth rate in earnings per share and would continue to achieve strong double-digit growth.”
The three Donnkenny executives are Richard Rubin, chief executive officer and president; Edward T. Creevy, former chief financial officer, and Ronald Hollandsworth, former controller.
The two other suits, naming Donnkenny and the same three executives, were brought by individual shareholders.
Lee Spence filed suit charging that the defendants artificially inflated the share price of Donnkenny, which then allowed corporate insiders to sell at the inflated price for a profit of $9.5 million from June 1995 through August 1996. Spence said he purchased 500 shares of Donnkenny on Feb. 23 at $13.75 a share and another 500 shares on Aug. 27 at $17.50 per share. Donnkenny stock closed Friday at 3 11/16, up 1/16 in over-the-counter trading on a volume of 1.4 million shares.
The other suit filed on Nov. 20 was by Robert and Annie Weiss, who own 100 shares of Donnkenny. All three suits are seeking class certification and unspecified damages.
Holder suits began hitting Donnkenny shortly after it disclosed on Nov. 7 that its auditing committee, along with independent counsel, was investigating its financial statements. One was filed on Nov. 12 and a second was filed Nov. 18