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THQ Faces Another Lawsuit

| 18 Jul 2012 16:30
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The uDraw GameTablet debacle has inspired a second class action lawsuit.

The uDraw GameTablet was a big hit when it was released for the Nintendo Wii in 2010, but the Xbox 360 and PlayStation 3 versions tanked badly when they came out a year later - very badly indeed, to the point that the company was forced to cut its third quarter sales forecast for the 2011 fiscal year by a stunning 25 percent. One class action lawsuit alleging that THQ failed to disclose the true magnitude of the uDraw disaster in a timely fashion has already been filed, but now New York-based law firm Levi Korsinsky LLP is angling for a piece of the action too.

"The complaint alleges that THQ and certain of its executive officers issued false or misleading statements concerning the Company," the firm wrote in an announcement of the lawsuit and request for information posted on its site.

"Specifically, it is alleged that defendants misrepresented or failed to disclose that: (a) the Company's uDraw GameTablet ('uDraw') for Microsoft Xbox 360 and Sony PlayStation 3 was not being purchased by owners of those gaming systems; (b) because demand for uDraw was below internal expectations, the Company would have to take back, or provide price protection, on hundreds of thousands of units that it had sold; and (c) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects," it says.

The document doesn't indicate what the firm is seeking in the suit (my money is on money) but anyone who purchased THQ stock between May 3, 2011 and February 3, 2012 can request more information about the suit and whether or not they are a potential claimant by filling out and submitting the form at zlkdocs.com.

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