Attorney Lesley Portnoy is representing the plaintiffs. Glancy Prongay & Murray LLP
NEW YORK (Legal Newsline) - A brand management company is being sued by investors claiming the company wasn't forthcoming with stockholders about its acquisition costs.
Gene Niksich filed the lawsuit on June 23 in the U.S. District Court for the Southern District of New York against Iconix Brand Group claiming the company didn't account for costs associated with the acquisition part of its business.
Iconix makes its money by acquiring licensing rights to existing consumer fashion brands, and then licenses the rights to use the brand in clothing, shoes, media and other household items. The lawsuit claims the company “failed to properly account for the key metrics of freecash flow and organic growth.”
The chief financial officer resigned at the end of March after the trading session had ended for the day. Stock fell about 7 percent to $33.67 per share on the news. A month later, the chief operating officer resigned, and it was reported the resignation could be tied to “irregularities with free-cash flow accounting.”
The lawsuit is seeking class status for those who owned Iconix stock between Feb. 20, 2013 and April 17, 2015. The suit is seeking an unspecified amount in damages plus court costs.
Niksich is represented by Lesley F. Portnoy of Glancy Prongay & Murray LLP in New York City; Lionel Z. Glancy, Robert V. Prongay and Casey E. Sadler of the same law firm in Los Angeles; and Howard G. Smith of the Law Offices of Howard G. Smith in Bensalem, Pa.
U.S. District Court for the Southern District of New York case number 1:15-cv-04860