Faruqi & Faruqi, LLP Announces Investigation of AgFeed Industries, Inc. (FEED)
Faruqi & Faruqi, LLP, a national law firm concentrating on investor rights is investigating potential wrongdoing at AgFeed Industries, Inc. (“AgFeed” or the “Company”) (Nasdaq: FEED). Faruqi & Faruqi, LLP seeks to determine whether certain officers and directors at AgFeed violated federal securities laws in connection with statements made to the Company’s shareholders.
The investigation focuses on whether: (1) AgFeed avoided correctly reporting the Company’s bad debt levels by relying on a flawed “formula based analysis”; (2) the Company’s allowances for doubtful accounts were highly undervalued; and (3) AgFeed’s accounts receivable were overvalued and its bad debts were undervalued, causing reported asset values to be overstated and expenses to be understated.
On August 2, 2011, AgFeed announced disappointing preliminary second quarter financial results, including an anticipated loss of $17 million and $5 million in allowances for bad debt expenses. Further, on August 9, 2011, AgFeed disclosed in its Form 10-Q filed with the SEC that the Company had only $13.2 million in accounts receivables, net of a $7 million allowance for doubtful accounts as of June 30, 2011. This is in stark contrast to the $28.6 million in accounts receivable, net of a $1.9 million allowance for doubtful accounts, for the prior quarter.
Additionally, on September 29, 2011, AgFeed’s Board established a special committee to investigate the Company’s accounting practices in relation to its Chinese operations.
If you purchased AgFeed securities between March 16, 2009 and August 2, 2011 and you would like to discuss your legal rights, visit www.faruqilaw.com/FEED. You can also contact us by calling Anthony Vozzolo or Richard W. Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to email@example.com or firstname.lastname@example.org Faruqi & Faruqi, LLP also encourages anyone with information regarding AgFeed’s conduct during the period in question to contact the firm, including whistleblowers, former employees, shareholders and others.
Richard W. Gonnello
Faruqi & Faruqi, LLP
685 Third Avenue 26th Floor
New York, NY 10017
Tel: (212) 983-9330
If you have information regarding this case that you would like to make available, please click here to contact us about our investigation.