the fourth quarter of 2004 were $72-73 million. This included at least $5.8 million in improperly recorded rebates, making the press release false or misleading.
57.When the March 17 press release was issued, C&A was facing a liquidity crisis and did not have enough money to pay its bills. To hide this fact, Stockman directed that all 2005 liquidity figures be omitted from the press release. The only liquidity figure used in the press release was from December 31, 2004, more than two months earlier. Stockman and Galante knew, or were reckless in not knowing, that in view of the liquidity crisis being experienced by C&A, the failure to disclose current liquidity information in the March 17 press release made that release materially misleading.
58.The March 17 press release stated that C&A’s liquidity on December 31, 2004, was $86 million. The majority of that liquidity was undrawn commitments under its accounts receivable facility. But C&A could not have borrowed the full amount of the undrawn commitments without breaching financial covenants. In fact, only approximately $12 million in liquidity was available to C&A on December 31, 2004. C&A's use of the $86 million liquidity figure without reference to the covenant restrictions was inconsistent with C&A's prior disclosure practices and materially misleading. Stockman and Galante understood the impact of the restrictive covenants, were aware of C&A's prior disclosure practices, and knew that far less than $86 million would have been available to C&A on December 31, 2004.
59. The March 17 press release also contained material misrepresentations concerning the scope of management's internal investigation and the impact of the improper accounting for rebates. C&A stated in this press release that the rebates