NEW YORK, Dec. 10, 2008 (GLOBE NEWSWIRE) -- Stull, Stull & Brody and Gainey & McKenna announced today that they filed a Class Action Complaint for Violations of the Employee Retirement Income Security Act (the "Complaint") against NovaStar Financial, Inc. ("NovaStar" or the "Company") (Pink Sheets:NOVS) and certain individuals who are believed to have been fiduciaries of the NovaStar Financial, Inc. 401(k) Plan (the "Plan") during the period May 4, 2006 through November 15, 2007, inclusive (the "Class Period"). The Complaint alleges that Defendants allowed the imprudent investment of the Plan's assets in NovaStar common stock throughout the Class Period despite the fact that they knew or should have known that such investment was unduly risky and imprudent due to the Company's serious mismanagement and improper business practices. The Complaint further alleges that the Plan's fiduciaries also failed to disclose information about NovaStar to the Plan's participants in violation of ERISA.
Novastar has filed a motion to dismiss which argues, among other things, that the Plaintiff lacks standing to sue. Plaintiff has opposed this motion and the motion is presently awaiting decision by the Court. In addition, on December 1, 2008 the Court issued an Order scheduling further proceedings in this case, including a deadline of June 17, 2009 for the completion of discovery and the setting of the case for trial by jury commencing on December 7, 2009.
If you were a participant in NovaStar's 401(k) plan and held NovaStar stock in your Plan account at any time between May 4, 2006 through November 15, 2007 and would like more information about the lawsuit, or about how you may participate in the lawsuit in a lead or non-lead capacity, you may contact Stull, Stull & Brody or Gainey & McKenna. There is no cost or obligation.