Dec 17, 2004 By Patty Yauger 3 min read

Four law firms from across the country representing Anchor Glass Container Corp. investors are alleging company officials failed to disclose critical information about its production, which translated into the closure of the South Connellsville plant and caused financial losses to stockholders. Schiffrin & Barroway, LLP of Bala Cynwyd, Pa., Charles J. Piven, P.A. of Baltimore, Md., Dyer & Shuman, LLP of Denver and Vianale & Vianale LLP of Boca Raton, Fla., have filed securities fraud class action lawsuits this week on behalf of their clients with the Florida federal court.

The company headquarters is based in Tampa, Fla.

Corporate officials could not be reached Thursday for comment.

According to the Vianale & Vianale lawsuit, after twice emerging from bankruptcy, the bottle maker sold 7.5 million shares and used the $127.8 million it received from the sell-off to buy back insiders’ preferred stock.

“Anchor’s financial statements were false and misleading because the company violated the General Accepted Accounting Principles by failing to write-down material amounts of obsolete and defective inventory, thus materially overstating its net income and earnings per share,” states the lawsuit.

Following the September 2003 sell-off, the company continued to issue “glowing press releases about its sales and its contracts to provide glass bottling to beverage makers,” according to the lawsuit.

Anchor statements made at the time said that the “recapitalization has provided (Anchor) with the financial flexibility to fund new capital projects to substantially enhance our productivity, increase our capacity and upgrade our manufacturing facilities,” but did not include information that the capital improvements would shutter the South Connellsville plant, alleges the lawsuit.

“(Anchor) failed to disclose that these capital improvements would result in the closure of the Connellsville facility and excess inventory that would later have to be accounted for by a material write down,” states the suit.

A statement issued by Darrin Campbell, company chief executive officer, following the plant closure, said that a large inventory contributed to the shutdown of production.

“Our recently completed analysis of Anchor Glass’ existing capacity given the current industry environment indicated that this plant’s economics could not be improved materially.”

Following the Nov. 4 closure of the borough facility, said the lawsuit, the company then reversed its prior public stance that the company assets were stable and instead reported a $5.9 million net loss in the third quarter and that during the fourth quarter it would curtail production to help lower inventory levels in 2005.

The local plant closure caused the loss of more than 300 jobs.

State Sen. Richard Kasunic, D-Dunbar, recently said that the company has informed Gov. Ed Rendell it would consider re-opening if contracts could be found.

“There is still a glimmer of hope,” said Kasunic.