FORT LAUDERDALE, Fla., June 27 /PRNewswire-FirstCall/ -- Parlux
Fragrances, Inc. (Nasdaq: PARL) ("Parlux") announced today that it was
served with a shareholder's class action complaint (the "Class Action")
filed in the Circuit Court of the Seventeenth Judicial Circuit in and for
Broward County, Florida by Glen Hutton, purporting to act on behalf of
himself and other public stockholders of Parlux, and a stockholder
derivative action (the "Derivative Action") filed in the Circuit Court of
the Seventeenth Judicial Circuit in and for Broward County, Florida by
NECA-IBEW Pension Fund, purporting to act derivatively on behalf of Parlux.
The Class Action names Parlux Fragrances, Inc. as a defendant, along
with its directors, Ilia Lekach, Frank A. Buttacavoli, Glenn Gopman, Esther
Egozi Choukroun, David Stone, Jaya Kader Zebede and Isaac Lekach. The Class
Action relates to the proposal (previously disclosed in Parlux's June 14,
2006 Form 8-K) from PF Acquisition of Florida LLC, which is presently owned
by Ilia Lekach, to acquire all of the outstanding shares of common stock of
Parlux for $29.00 ($14.50 after the stock split) per share in cash (the
"Proposal"). The Class Action seeks equitable relief for inadequate and
unfair consideration, without full disclosure of all material information,
to the detriment of the public shareholders, all in breach of defendants'
fiduciary duties. The Class Action alleges that the Proposal is solely
designed to ensure that Parlux's management completes the Proposal despite
the fact that the consideration called for in the Proposal is unfair to the
public shareholders and Parlux's public shareholders have not been provided
with all material information concerning the Proposal necessary for them to
make an informed decision.
The Derivative Action names the identical defendants as the Class
Action and relates to the Proposal. The Derivative Action seeks to remedy
the alleged breaches of fiduciary duties, waste of corporate assets, and
other violations of law and seeks injunctive relief from the Court
appointing a receiver or other truly neutral third party to conduct and/or
oversee any negotiations regarding the terms of the Proposal, or any
alternative transaction, on behalf of Parlux and its public shareholders,
and to report to the Court and plaintiff's counsel regarding the same. The
Derivative Action alleges that the unlawful plan to attempt to buy out the
public shareholders of Parlux without having proper financing in place, and
for inadequate consideration, violates applicable law by directly breaching
and/or aiding the other defendants' breaches of their fiduciary duties of
loyalty, candor, due care, independence, good faith and fair dealing,
causing the complete waste of corporate assets, and constituting an abuse
of control by the defendants.
The Independent Committee of the Board has responded to the Proposal
(the details of which were included in Parlux's June 20, 2006 Form 8-K,
filed on June 22, 2006). Parlux and the other named defendants have engaged
experienced Florida securities counsel and intend to respond to the Class
Action and the Derivative Action in a timely manner, but Parlux believes
that the Class Action and the Derivative Action are without merit.
Parlux Fragrances, Inc. is a manufacturer and international distributor
of prestige products. It holds licenses for Paris Hilton fragrances,
watches, cosmetics, sunglasses, handbags and other small leather
accessories in addition to licenses to manufacture and distribute the
designer fragrance brands of Perry Ellis, GUESS?, XOXO, Ocean Pacific (OP),
Maria Sharapova, Andy Roddick, babyGund and Fred Hayman Beverly Hills.
Parlux may periodically release forward-looking statements pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results, performance
or achievements of Parlux or its industry to be materially different from
any future results, performance or achievements expressed or implied by
such forward-looking statements. These risks and uncertainties include,
among others, future trends in sales and Parlux's ability to introduce new
products in a cost-effective manner. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of
the date thereof. Parlux undertakes no obligation to publicly release the
result of any revisions to these forward-looking statements that may be
made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
SOURCE Parlux Fragrances, Inc.
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Related links:
http://www.parlux.com
http://www.prnewswire.com/comp/674987.html /
CONTACT:
Frank A. Buttacavoli, Parlux Fragrances,
Inc., +1-954-316-9008, ext. 8117
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