A new class action suit against Ply Gem Holdings is charging the exterior building products manufacturer with misrepresenting its financial performance.
Robbins Geller Rudman & Dowd LLP announced the suit on Monday, which is being filed on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of purchasers of Ply Gem shares related to its May 22, 2013 IPO.
The complaint alleges that Ply Gem violated the Securities Act by deliberately neglecting to disclose information in its Registration Statement that had a material effect on its future operating results.
Among the alleged "lies by ommission" were Ply Gem's agreement to buy back inventory from The Home Depot, which stipulated that Ply Gem initially sell the retailer a large volume of low-priced, low-margin product that Ply Gem had difficulty selling during April and May of last year.
Additionally, the Registration Statement allegedly failed to properly disclose all material risks and changes in Ply Gem's business affairs.
Lawyers allege that these ommitted events altered the company's operating results for the worse during the second quarter ended June 29, 2013 -- such that its common shares are now trading at a level that's 50% lower than the IPO price.
A Ply Gem spokesperson told HCN that the company has not yet been served with the lawsuit and does not comment on active litigation.