Three law firms last week announced participation in a class action lawsuit against. The law firm of Schatz & Nobel announced a lawsuit seeking class-action status has been filed in the United States District Court for the District of Connecticut on behalf of all persons who purchased the publicly traded securities of United Rentals between October 23, 2003 and August 30, 2004. Also included are all those who acquired United Rentals shares through its acquisition of Canadian aerial rental firm Skyreach Equipment.
The complaint alleges that United Rentals and certain of its officers and directors issued materially false statements, failing to disclose that the company, in an effort to generate a more favorable stock price and raise capital, manipulated its financial results through the use of restructuring charges, asset writedowns and debt refinancing. It also claims that United improperly delayed recognition of bad accounts receivable; and that, as a result, the company’s announced financial results were in violation of Generally Accepted Accounting Principles.
On August 30, United announced that it had received notice that the SEC was conducting a non-public, fact-finding inquiry of the company.
A United Rentals official said it was too early to comment on the lawsuits, which it had not yet received at press time, but that the company is fully cooperating with the SEC inquiry.