On October 12, 2012, securities lawyers filed a class action lawsuit against Chanticleer Holdings, Inc. (NASDAQ: HOTR), Michael D. Pruitt, Eric S. Lederer, Michael Carroll, Paul I. Moskowitz, Keith Johnson, Merriman Capital, Inc., Dawson James Securities, Inc., Creason & Associates PLLC in United States District Court in the Southern District of Florida. Chanticleer operates the Hooters casual dining restaurant brand in international markets. As of August 28, 2012, the company franchised and operated approximately 430 Hooters restaurants in 27 countries.
The putative class action is brought on behalf “persons and entities who purchased or otherwise acquired Chanticleer Units pursuant to or traceable to the Company’s public offering, which commenced on June 21, 2012 (the “Offering”), including those who purchased or otherwise acquired Chanticleer common stock and Units between June 21, 2012 and September 10, 2012, inclusive.”
The complaint alleges, among other things, violations of the Securities Act of 1933 and asserts that the Company’s registration statement and prospectus was false and misleading. In particular, the complaint alleges that on September 10, 2012, the Company filed a Form 8-K with the Securities and Exchange Commission revealing:
On September 7, 2012, the audit committee of Chanticleer Holdings, Inc. (the “Company”), upon recommendation of the Company’s management determined that the Company’s consolidated Financial Statements for its fiscal year ending December 31, 2011 and the interim unaudited financial statements for its fiscal quarters ending March 31, 2012 and June 30, 2012 could no longer be relied on. The Company determined that the audited financial statements of Kiarabrite (Pty) Ltd., Dimaflo (Pty) Ltd., Tundraspex (Pty) Ltd., Civisign (Pty) Ltd. and Dimalogix (Pty) Ltd. (collectively referred to as the “South Africa Operations”) which are the South African management company and the four entities setup for the stores we operate in South Africa, were not audited as the Company was led to believe. Mark Hezlett, the CFO and Director of our South Africa Operations, has resigned effective immediately.
Howard v. Chanticleer Holdings, et. al, Case No. 12-81123 (Southern District of Florida)