Robbins Umeda LLP Announces an Investigation of CPI Corporation
Robbins Umeda is investigating possible breaches of fiduciary duty and other violations of the law by certain officers and directors at CPI Corporation (NYSE: CPY). Concerned shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly. You can also contact attorney Gregory E. Del Gaizo at (800) 350-6003.
Robbins Umeda LLP’s investigation focuses on whether officials at CPI breached their fiduciary duties to shareholders, maintained inadequate controls, and wasted corporate assets to the detriment of the company and investors. In particular, the firm is investigating allegations that members of the board of directors concealed from the investing public material adverse facts that the company was preforming poorly; that its recent acquisitions aimed to grow the business were not working at levels represented by officials; and that CPI’s cash flow would continue to deteriorate due to poor revenue growth.
On December 22, 2011, CPI announced its financial results for the third quarter ending November 12, 2011. The company disclosed to investors a staggering net loss of $7.25 million in revenue and a net sales decline of 11%. These disappointing results caused CPI to fail its leverage ratio test for its revolving credit facility and forced the company to obtain an amendment to its credit agreement. Accordingly, CPI will be forced to cease payment of dividends to investors. Since these facts have emerged, CPI had increasing become the target of costly public and legal scrutiny, while the company’s common stock lost nearly 63% of its value on December 22, 2011, and has since further declined.
Robbins Umeda LLP highlights that CPI shareholders have the option to file a derivative action to hold those officers and directors accountable for damaging the company. Remedies commonly sought in derivative actions include corporate governance reforms designed to prevent future misconduct, removal of officers or directors whose misconduct injured the corporation, and monetary payments in the form of damages and disgorgement of ill-gotten gains.
Robbins Umeda LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.