Harwood Feffer LLP Announces Investigation of Groupon, Inc.
NEW YORK, April 2, 2012 /PRNewswire/ -- Harwood Feffer LLP (www.hfesq.com) is investigating potential claims against the board of directors of Groupon, Inc. ("Groupon" or the "Company") (NASDAQ: GRPN), concerning whether the board has breached its fiduciary duties to shareholders.
On March 30, 2012, Groupon issued a press release announcing that it would be forced to revise its financial results for the fourth quarter of 2011. Additionally, Groupon admitted that its independent auditor had found "material weakness in its internal controls over its financial statement close process in its Annual Report on Form 10-K for year ended December 31, 2011."
The financial revisions result in a reduction to fourth quarter 2011 revenue of $14.3 million, as well as an increase in fourth quarter operating expenses that reduced operating income by $30.0 million, net income by $22.6 million, and earnings per share by $0.04. The Company announced that the revisions "are primarily related to an increase to the Company's refund reserve accrual to reflect a shift in the Company's fourth quarter deal mix and higher price point offers, which have higher refund rates." Moreover, Groupon stated that "the revisions have an impact on both revenue and cost of revenue."
The Company additionally disclosed that mere weeks after its Initial Public Offering in November 2011, it: (i) failed to maintain adequate financial closing processes; (ii) failed to maintain effective controls over the completeness and accuracy of accounts and account reconciliation review and approval; and (iii) failed to have adequate policies and procedures in place to ensure the timely and effective review of estimates, assumptions and related reconciliations, including those related to customer refund reserves.
Our investigation concerns whether the Groupon board of directors has breached its fiduciary duties to shareholders, grossly mismanaged the Company, and/or committed abuses of control in connection with the foregoing.
If you own Groupon shares and wish to discuss this matter with us, or have any questions concerning your rights and interests with regard to this matter, please contact:
Robert I. Harwood, Esq.
Harwood Feffer LLP
488 Madison Avenue
New York, New York 10022
Phone Numbers: (877) 935-7400, (212)935-7400
Harwood Feffer has been representing individual and institutional investors for many years, serving as lead counsel in numerous cases in federal and state courts. Please visit the Harwood Feffer LLP website (http://www.hfesq.com) for more information about the firm.
Attorney Advertising. © 2011 Harwood Feffer LLP. The law firm responsible for this advertisement is Harwood Feffer LLP (www.hfesq.com). Prior results do not guarantee or predict a similar outcome with respect to any future matter.
SOURCE Harwood Feffer LLP
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