THQ Hit With Second uDraw Lawsuit

Allegedly made "misleading statements" about sales of peripheral.

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THQ Hit With Second uDraw Lawsuit
THQ's uDraw predicament is getting worse and worse - the company has now been slapped with a second lawsuit in as many months for allegedly issuing "false or misleading statements" over the peripheral's sales figures.

The filing from Levi and Korsinsky swiftly follows a prior lawsuit from Robbins Umeda LLP last month. The latter also accused THQ of "materially false and misleading statements" over uDraw sales. Both were filed with the Californian District Court, making quite a pile for THQ to overcome.

The fresh lawsuit alleges that, "Specifically, it is alleged that defendants [THQ] misrepresented or failed to disclose that: (a) the Company's uDraw GameTablet 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."

Ouch. Before all this legal chaos kicked off, THQ was also being investigated by law firm Holzer Holzer & Fiste LLC. That investigation may well be the reason why we're looking at this situation today.

Maybe SpongeBob can save us all.


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