SOURCE: Abraham, Fruchter & Twersky, LLP

October 12, 2009 16:02 ET

Abraham, Fruchter & Twersky, LLP Files Class Action Suit Against RHI Entertainment, Inc.

NEW YORK, NY--(Marketwire - October 12, 2009) - Abraham, Fruchter & Twersky, LLP today announced that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of the common stock of RHI Entertainment, Inc. ("RHI" or the "Company") (NASDAQ: RHIE) pursuant and/or traceable to the Company's initial public offering (the "IPO" or the "Offering") on or about June 19, 2008.

The complaint charges RHI and certain of its executives with violations of the Securities Act of 1933 by, among other things, issuing a materially false and misleading Prospectus and Registration Statement (collectively, the "Registration Statement"). According to the complaint, the Company's executives made materially false and misleading statements in the Registration Statement regarding the company's financial prospects at the time of the IPO, that based on their business operations, liquidity, and expansion distribution opportunities, the Company had orders for and would be able to release 40 MFT movies and mini-series. The complaint further alleges that defendants failed to disclose that, given the declining state of the credit markets and other negative factors then impacting the Company's business, the Company would not be able to complete 40 MFT movies and miniseries in 2008. This caused the price of the IPO to be artificially inflated.

On November 6, 2008, the Company disclosed the liquidity and growth problems to the public in a press release, which caused the price of RHI common stock to drop from $13.91 per share to $7.95 per share on November 10, 2008, on heavy trading volume. RHI common stock currently trades at $2.87 per share.

Plaintiff seeks to recover damages on behalf of all purchasers who purchased common stock of RHI pursuant and/or traceable to the Company's IPO on or about June 19, 2008. The Plaintiff is represented by Abraham, Fruchter & Twersky, LLP which has extensive experience in securities class action cases, and the firm has been ranked among the leading class action law firms in terms of recoveries achieved by a survey of class action law firms conducted by Institutional Shareholder Services.

If you would like to discuss this action or if you have any questions concerning this notice or your rights as a potential class member or lead plaintiff, you may contact: Jack G. Fruchter or Arthur J. Chen of Abraham, Fruchter & Twersky, LLP at 212-279-5050, or via e-mail at jfruchter@aftlaw.com or achen@aftlaw.com, respectively. If you wish to serve as lead plaintiff, you must move the Court no later than December 8, 2009. Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class.

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Contact Information

  • Contact:
    Jack G. Fruchter
    Arthur J. Chen
    Abraham, Fruchter & Twersky, LLP
    One Penn Plaza, Suite 2805
    New York, N.Y. 10119
    Telephone: (212) 279-5050