Home Solutions remains vague on $100M Hillsborough contract
posted by admin in Home DepotA Dallas-based construction company under fire for not disclosing details of a $100 million contract it claims to have secured in Hillsborough County faces accusations of similar practices in the past.
Home Solutions of America Inc., parent company of Tampa-based contractor Fireline Restoration Inc., said May 31 that Fireline had won the contract for a 600,000-square-foot retail and office project, yet has since refused to provide any more details on the deal. Those details, including the client’s identity, are subject to a confidentiality agreement, company executives said.
Home Solutions’ (Nasdaq: HSOA) shares rose to a 52-week high of $8.24 after announcing the Fireline contract. Internet stock observers began questioning the validity of the contract after the stock jumped.
Landing a $100 million deal would be huge for Home Solutions, which reported $127.2 million in revenue last year. It posted record revenue of $39.9 million in this year’s first quarter, largely attributed to its acquisition of Fireline last July.
Katrina claims
In court documents filed last year, Home Solutions investors claim the company put out false and misleading news releases and exaggerated revenue prospects in the aftermath of Hurricane Katrina in 2005.
A class-action lawsuit filed in March of this year in U.S. District Court in Dallas alleges Home Solutions, its executives and company directors misrepresented contracts, which led investors to buy Home Solutions stock at artificially inflated prices.
Attorney Edmund Searby, who represents the investors, declined comment.
The suit says in spring 2006 Home Solutions’ chairman and CEO, Frank Fradella, and other company officers made false statements and failed to disclose adverse facts. Those practices allowed the company’s officers to sell 1.35 million shares of Home Solutions stock at inflated prices for proceeds totaling $15.7 million, according to public filings in the case.
“Defendants shamelessly misrepresented and exaggerated Home Solutions prospects … to pump up Home Solutions stock price,” the suit states.
The lawsuit further alleges Home Solutions issued a press release April 11, 2006, saying the company was awarded contracts “worth up to $40 million” to rebuild areas in Louisiana, Mississippi and Florida affected by hurricanes Katrina, Rita and Wilma. The suit claims those contracts had not been awarded.
Tags: accusations, company, construction, first quarter, investors, Project, provide, stockRelated posts
Did you enjoy Home Solutions remains vague on $100M Hillsborough contract? Subscribe to RSS Feed.
Social Bookmarking
