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LOVE.US
id: 915

Lovesac Company (LOVE) Investor Settlement

D. Connecticut
Court
3:23-cv-01640
Case number
08 Jun 2022
Class period Start
16 Aug 2023
Class period End
Lovesac has reached an agreement with $LOVE investors over claims related to the undisclosed accounting issues.

Outline

In 2023, Lovesac revealed accounting errors, including incorrectly adding $2.2M from the previous year and using wrong methods for delivery expenses. Following the company’s disclosure, $LOVE significantly fell, and Lovesac faced a lawsuit from investors.

Timeline
  • On March 30, 2023: Lovesac reported its financial results for 2023.
  • On August 16, 2023: Lovesac disclosed accounting errors in an SEC filing.
  • On August 17, 2023: Following the disclosure, $LOVE price fell by 2.95%.
  • On December 19, 2023: The stockholder filed a lawsuit against Lovesac Company for misleading accounting results.
Background

On August 16, 2023, Lovesac revealed in an SEC filing that its Board of Directors “commenced an internal investigation related to the recording of last-mile shipping expenses”.

This investigation was triggered by an incorrect accounting entry that included $2.2 million of shipping expenses from the previous fiscal year.

Lovesac also found additional mistakes in how it calculated shipping costs.

Specifically, the company used an incorrect method to account for last-mile shipping expenses.

The company stated that “as a result of the identified errors the Company believes that previously reported operating income and net income were overstated by approximately $1.5M to $2.5M”.

This disclosure caused a drop in $LOVE, which fell by 2.95% on August 17, 2023.

Due to these issues, shareholders filed a lawsuit against Lovesac for not properly disclosing problems with its accounting.

What can investors expect now?

Lovesac has reached a settlement with $LOVE investors who claimed the company did not properly disclose problems with its accounting.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.
Case Status
Tentative Settlement
Alleged Offence
Misleading Statements
Financial Misrepresentation
Failure to Disclose
Omissions
Suspected Party
Directors
Management
Security Type
Stocks
Trade Direction
Long
Filing date
19 December 2023
Lead Plaintiff Deadline
19 February 2024
Plaintiffs
Albert Gutknecht
Attorneys
Faxon Law Group LLC, The Rosen Law Firm, P.A., The Schall Law Firm
Defendants
Donna Dellomo, Shawn Nelson
Judge
Hon. Kari A. Dooley
Trades matching type
FIFO

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