BALA CYNWYD, Pa., Sept. 21 /PRNewswire/ -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Middle District of Florida who purchased the common stock of Radiation Therapy Services, Inc. (“Radiation Therapy” or the “Company”) between June 17, 2004 and September 8, 2004, (the “Class Period”).
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Darren J. Check, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges Radiation Therapy, Daniel E. Dosoretz, Howard M. Sheridan, David M. Koeninger, Joseph Biscardi, James H. Rubenstein, and Michael J. Katin with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Radiation Therapy is a provider of radiation therapy services to cancer patients. The Company owns, operates and manages treatment centers, focused exclusively on providing comprehensive radiation treatment alternatives ranging from conventional external beam radiation to newer, technologically advanced options. On June 18, 2004, the Company announced that the underwritten initial public offering (“IPO”) of 5.5 million shares of its common stock had been priced at $13 per share. The shares of its common stock would trade on the Nasdaq under the symbol “RTSX.” The Company would offer 4 million newly issued shares of common stock in the initial public offering which would result in gross proceeds to the Company of approximately $52 million. In addition, certain shareholders would offer 1.5 million currently outstanding shares of common stock in the initial public offering at the same price.
According to the complaint, the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company’s IPO was purely a liquidity event for management/owners - not a source of growth capital for the Company because 100% of the IPO proceeds went into the hands of the Company’s primary shareholders; (2) that the numerous related party transactions by the Company increased the risk of its business model running afoul of State and Federal laws governing corporate practice of medicine, fee splitting and physician-referrals; and (3) that organic revenue growth had slowed dramatically and could be further disrupted in January due to changes in the way medical oncologists run their businesses.
On September 9, 2004, Banc of America Securities (“Banc of America”) initiated coverage of Radiation Therapy Services with a “sell” rating and an $11 target price. Banc of America said the Company’s IPO “was purely a liquidity event for management/owners - not a source of growth capital for the company.” The research house noted that following the IPO management “gifted itself another 5% of the company via new option grants.” Banc of America also drew attention to the fact that in 2003, Radiation Therapy paid $6.6 million to outside companies controlled by senior management, underlining the increased regulatory risk of a business model that could “run afoul of State and Federal laws governing corporate practice of medicine, fee splitting and physician-referrals.” In addition, Banc of America said that although revenue growth remained “impressive,” organic revenue growth had slowed “dramatically” and could be further disrupted in January. In conclusion, the research house said: “We simply cannot recommend purchasing the stock until the company’s board structure (currently four insiders, just three independent directors) and extensive related party relationships are materially overhauled.” News of this shocked the market. Shares of Radiation Therapy fell $1.66 per share, or 11.98 percent, to close at $12.20 per share on unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com/
If you are a member of the class described above, you may, not later than November 22, 2004 move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Schiffrin & Barroway, or other counsel of your choice, to serve as your counsel in this action.
CONTACT: Schiffrin & Barroway, LLP Marc A. Topaz, Esq. Darren J. Check, Esq. Three Bala Plaza East, Suite 400 Bala Cynwyd, PA 19004 1-888-299-7706 (toll free) or 1-610-667-7706 Or by e-mail at info@sbclasslaw.com
Schiffrin & Barroway, LLP
CONTACT: Marc A. Topaz, Esq. or Darren J. Check, Esq. of Schiffrin &Barroway, +1-888-299-7706 (toll free) or +1-610-667-7706, orinfo@sbclasslaw.com
Web site: http://www.sbclasslaw.com/
