The action charges that National Golf and certain officers and directors violated the federal securities laws by issuing a series of materially false and misleading statements to the market throughout the class period, which had the effect of artificially inflating the market price of the company's securities.

The case is pending in the United States District Court for the Central District of California. The counsel for the plaintiffs is the Baltimore-based law offices of Charles J. Piven. National Golf's share price has fallen steadily from the mid $20s in July. It has been achieving new 52-week lows on a daily basis as of late. Shares closed Wednesday at $5.05, off $0.83 on the day.

On Feb. 13, National Golf Properties announced that it had executed a letter of intent to enter into a business combination with its primary tenant, American Golf Corp. and certain of American Golf's affiliates, including, among others, Golf Enterprises and European Golf.