Due in 5 hOurs

Hezasan, Inc., offers to buy P-Pal Corporation.  On May 1, P-Pal gives Hezasan copies of P-Pal's financial statements for the previous year.  The statements show an inventory of $1,000,000.  On May 15, P-Pal discovers that the previous year's inventory is overstated by $500,000, but does not inform Hezasan.  On June 1, Hezasan, relying on the financial statements, buys P-Pal.  On June 10, Hezasan discovers the inventory overstatement.  What legal theories can be applied and what remedies are available?  Why?