NEW YORK, Aug. 21, 2023 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Hawaiian Electric Industries, Inc. (NYSE: HE), and Lovesac Company (NASDAQ: LOVE). Our investigations concern whether these companies have violated the federal securities laws and/or engaged in other unlawful business practices. Additional information about each case can be found at the link provided.
Hawaiian Electric Industries, Inc. (NYSE: HE)
On Sunday, August 13, 2023, The Washington Post published an article entitled “Hawaii utility faces scrutiny for not cutting power to reduce fire risks”. It stated, in pertinent part, “Four days before fast-moving brush fires engulfed parts of Maui, weather forecasters warned authorities that powerful wind gusts would trigger dangerous fire conditions across much of the island and Hawaii. The state’s electric utility responded with some preemptive steps but did not use what is widely regarded as the most aggressive but effective safety measure: shutting down the power. [. . .] Hawaiian Electric was aware that a power shut-off was an effective strategy, documents show, but had not adopted it as part of its fire mitigation plans, according to the company and two former power and energy officials interviewed by The Washington Post. Nor, in the face of predicted dangerous winds, did it act on its own, utility officials said, fearing uncertain consequences. The decision to avoid shutting off power is reflective of the utility’s struggles to bolster its aging and vulnerable infrastructure against wildfires, said Jennifer Potter, who lives in Lahaina and was a member of the Hawaii Public Utilities Commission until just nine months ago.”
On this news, the price of Hawaiian Electric stock plummeted by as much as $13.44, or 41.5%, in intra-day trading on August 14, 2023.
For more information on the Hawaiian Electric investigation go to: https://bespc.com/cases/HE
Lovesac Company (NASDAQ: LOVE)
On August 15, 2023, Lovesac issued a press release announcing non-reliance on previously issued financial statements or a related audit report. The Company stated, “In June 2023, the Audit Committee (the “Audit Committee”) of the Board of Directors of The Lovesac Company (the “Company”) commenced an internal investigation related to the recording of last mile shipping expenses, resulting from the discovery of a recorded journal entry in the quarter ended April 30, 2023 to capitalize $2.2 million of shipping expenses that related to the fiscal year ended January 29, 2023. In addition to the aforementioned journal entry, the Company has identified through the investigation certain errors with the methodology used by the Company to calculate the accrual of its last mile freight expenses applicable to the Company’s financial statements for the fiscal year ended January 29, 2023 and the thirteen weeks ended April 30, 2023 (the “Prior Financial Statements”).” In addition, the Company stated “as a result of the identified errors related to last mile freight expenses, the Company believes that previously reported operating income and net income were overstated by approximately $1.5 million to $2.5 million and $1.0 million to $2.0 million, respectively, for fiscal year 2023. When aggregating this error with other estimated required correcting entries the Company believes that operating income and net income were overstated by approximately $2.0 million to $3.0 million and $1.5 million to $2.5 million, respectively, for the fiscal year ended January 29, 2023. Additionally, the Company believes that the identified errors related to the accrual methodology, together with the incorrectly recorded entry related to last mile freight expenses resulted in the overstatement of previously reported operating income and net income of less than $0.5 million, respectively, for the thirteen weeks ended April 30, 2023. When aggregating these errors with other estimated required correcting entries the Company believes that operating income and net income were overstated by less than $0.5 million, respectively, for the thirteen weeks ended April 30, 2023.” The Company further stated, “that the Company’s financial statements for fiscal year 2023 included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2023, management’s report on internal control over financial reporting for the fiscal year ended January 29, 2023, the associated audit report and report on internal control over financial reporting of the Company’s independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”), and the Company’s condensed financial statements included in the Company’s Quarterly Report on Form 10-Q for the thirteen weeks ended April 30, 2023, should no longer be relied upon.”
On this news, Lovesac’s stock price fell $0.50 per share, or 2.06%, to close at $23.76 per share on August 16, 2023.
For more information on the Lovesac investigation go to: https://bespc.com/cases/LOVE
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.