Stockholders File Suits Against Micropolis

Two stockholder lawsuits have been filed against Micropolis Corp. and the disk-drive maker’s management that stem from the collapse of Micropolis’ stock price in the spring.

The suits, filed in federal court in Los Angeles, allege that before the stock’s decline, the stock was “artificially inflated as a result of omissions and misstatements of material facts” about the financial health of Chatsworth-based Micropolis, the company said.

The suits seek to be class actions that would represent investors who bought the stock between Jan. 23 and June 12 this year, Micropolis said.

Stuart Mabon, the company’s president and chief executive, said in a statement that the suits are “without merit” and that Micropolis “will vigorously defend against the allegations.” He also said the suits did not claim specific damages.

After suffering major losses in the late 1980s, Micropolis posted profits in 1990 and the first quarter of this year, which helped the company sell an additional 2 million shares of stock to the public for $13.50 a share May 2.

But six weeks later, Micropolis announced that its second-quarter earnings and orders would trail year-earlier levels. That triggered a selloff in Micropolis’ stock in mid-June, to about $7 a share. (The stock closed Monday at $7.25 a share in national over-the-counter trading.)

Micropolis eventually did report a plunge in second-quarter profit, to $253,000 from $2.4 million a year earlier, which it blamed on slumping orders and price-cutting in the disk-drive industry.