NEW YORK - Furniture Brands (FBN), parent of Thomasville, Broyhill, Lane and other furniture brands, announced that it will move its common stock from the New York Stock Exchange (NYSE) to the over-counter-market (OTCBQ) due to its market capitalization falling below the NYSE's listing requirements, reports the Wall Street Journal. The OCTBQ is a market for less widely traded stocks.
FBN issued a press release annnouncing its plans to voluntarily delist from the NYSE. The company expects that the last day of trading of its common stock on the NYSE will be on or about Tuesday, Aug. 27, 2013 and that the next trading day will be the first day of quotation on the OTCQB.
The listing violation was filed because the FBN's market capitalization has been less than $50 million over a consecutive 30-day trading period and its last reported shareholders' equity was less than $50 million. In July, Furniture Brands had received its second warning from the NYSE in less than a year that its stock was in jeopardy of being delisted.
On August 16 it was announced that a class action lawsuit has been filed against FBN on the behalf of shareholders who bought company securities between February and August and feel the company withheld information about its struggles.
Plaintiff Keith Carter provides Exhibit A, showing 400 shares of stock he purchased June 3, 2013 valued at $5.68 per share, plummeted to $1.24 on August 7. Carter laid out his complaints in the filing:
"Plaintiff alleges that Defendants [Furniture Brands International] have fraudulently inflated FBN’s stock price during the Class Period by disseminating materially false and misleading statements, and failing to disclose material information known or recklessly disregarded by Defendants, concerning the Company’s true financial condition, operation and business prospects. 4. Specifically, throughout the Class Period, Defendants made false and misleading statements and/or failed to disclose that: (a ) the Company was experiencing weaknesses in its wholesale business; (b) the Company’s trade names were being carried at inflated values that would require material impairments; (c) the Company was experiencing severe liquidity issues."
Furniture Brands spokesperson Lisa Hanly told WoodworkingNetwork, "We believe these allegations are without merit and we plan to vigorously defend ourselves.”
Furniture Brands posted a $40.8 million loss in the second quarter on sales of $255 million.
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