Feb. 04, 2013 (Shareholders Foundation) -- An investigation on behalf of current long-term stockholders of shares Hovnanian Enterprises, Inc. (NYSE:HOV) was announced concerning whether certain Hovnanian Enterprises officers and directors possibly breached their fiduciary duties in connection with certain statements.


The investigation by a law firm concerns whether certain Hovnanian Enterprises officers and directors breached their fiduciary duties in connection with their conduct in seeking shareholders approval for an amendment to Hovnanian Enterprises Certificate of Incorporation.

In the Proxy Statement filed by Hovnanian Enterprises, Inc. with the Securities and Exchange Commission the Board of Directors recommends that Hovnanian Enterprises shareholders vote to approve an amendment to the Hovnanian Enterprises Certificate of Incorporation to increase the number of authorized shares of Class A Common Stock from 200,000,000 shares to 400,000,000 shares. The proxy also recommends that shareholders vote to increase the number of authorized shares of Class B Common Stock from 30,000,000 shares to 60,000,000 shares, and recommends that shareholders vote to approve an advisory vote on executive compensation.

According to the investigation the issuance of the additional shares could have a severe dilutive effect on NYSE:HOV common stock.

Hovnanian Enterprises, Inc. (NYSE:HOV) reported that its Total Revenue rose from over $1.13 billion for the 12 months period that ended on Oct 31, 2011 to over $1.48 billion for the 12 months period that ended on Oct. 31, 2012 and that its Net Loss for the same time periods decreased from $286.09 million to $66.20 million.

Shares of Hovnanian Enterprises, Inc. (NYSE:HOV) grew from as low as $1.03 per share in October 2011 to as high as $7.00 per share in December 2012.

On Feb. 4, 2013, NYSE:HOV shares closed at $5.32 per share.