Heilig-Meyers federal fraud lawsuits settled, dismissed
By Furniture Today Staff -- Furniture Today, November 11, 2002
Richmond, Va. — Two federal fraud lawsuits brought by Heilig-Meyers shareholders against the bankrupt retailer's directors and accounting firm Deloitte & Touche have been settled and dismissed.
Steven Biss, an attorney representing the shareholders, confirmed that all matters have been settled and that each party is covering its owns legal costs. He declined further comment. Attorneys representing Heilig-Meyers directors and Deloitte & Touche did not return telephone calls.
The suits were brought last year by seven shareholders seeking $12.4 million in damages for alleged fraud and securities violations. Deloitte & Touche tried to quash the suits, but a federal judge ruled they could proceed in the name of one stockholder, John Cullather, who acquired his stock after Heilig-Meyers released its 2000 annual report.
Cullather said he bought his shares after reading that report, which showed a solvent company with shareholder equity of about $535 million. The company filed for Chapter 11 bankruptcy in August 2000 and said shareholder equity had been wiped out.
Heilig-Meyers, still operating under Chapter 11, has sold or closed all stores except for the 67-unit The RoomStore.
