According to the Associated Press, PR Diamonds Inc. filed a lawsuit last week claiming that management of the Milford, Ohio, company knowingly or recklessly misrepresented the company's net income and earnings in 1998 and 1999.
PR Diamonds has asked the judge to declare the lawsuit a class action, representing all investors who bought Intrenet's stock between Feb. 19 and Oct. 13 of last year.
The suit names Intrenet, Chief Executive John P. Chandler and board Chairman Eric C. Jackson.
"In truth, the company's earnings were lower than had been represented by the company because defendants had improperly inflated net income by approximately $1.3 million, in violation of generally accepted accounting principles," the lawsuit says.
In October, Intrenet appointed an outside legal firm to help with the company's internal investigation of "accounting issues" the company discovered at its Columbus, Ohio-based Advanced Distribution System subsidiary. It appeared that an employee who was no longer with the company had inflated Intrenet's profits. Even the doctored financial statements showed major losses, and Intrenet was in default with its primary lender. On Jan. 2, the company announced it would liquidate its four trucking subsidiaries, and laid off most of its 1,700 employees.