I2 SHAREHOLDERS FILE LAWSUIT AGAINST FIRM
Byline: Valerie Seckler
NEW YORK — E-business software supplier i2 Technologies Inc. and two of its executives — chairman and chief executive officer Sanjiv Sidhu and executive vice president and chief financial officer William M. Beecher — are the targets of a class-action lawsuit filed on behalf of shareholders in the company between Jan. 9 and Feb. 26.
A Vermont-based law firm, Johnson & Perkinson, has a suit pending in U.S. District Court for the Northern District of Texas alleging that the Dallas-based technology provider violated the Securities Exchange Act of 1934 “by providing materially false and misleading information about i2’s business.” It claims that as a result of those statements, i2’s stock traded at “artificially inflated prices” between Jan. 9 and Feb. 26.
In addition, the complaint alleges that unbeknownst to investors, Nike Inc. was experiencing problems implementing an i2 inventory management program during that period, placing i2’s relationship with Nike at risk. The reference is to the widely publicized statement made by Nike on Feb. 26, in which the Beaverton, Ore.-based sporting goods giant revised its third-quarter and full-year earnings estimates downward, and blamed, among other things, “complications arising from the impact of implementing [its] new demand-and-supply planning systems,” provided by i2.
Following that criticism, i2’s stock lost 22 percent of its value in a single day, falling from its previous day’s closing price of $35.50 to $27.56. The class action claims that prior to the exposure of the problems with Nike, certain i2 insiders sold, in aggregate, more than $97 million in i2 stock to the public. On Friday, i2’s stock added 36 cents to close at $16.22 in Nasdaq trading. The technology provider lost $774 million for the three months ended March 31, despite a 91 percent increase in revenue to $357 million.