divine, Inc. - Securities Class Action

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_______________
Copyright (c) 2001
Stanford Law School

divine, Inc. Summary: On August 30, 2006, the Order entered the Order by U.S. District Judge Patti B. Saris preliminarily approving the settlement and providing for notice.

On March 8, 2005, the plaintiffs filed a Second Consolidated Class Action for Violations of the Federal Securities Law, and the defendant responded by filing a motion to dismiss on April 7, 2005. On March 16, 2006, the Court entered the Order denying the defendant’s motion to dismiss without prejudice on the grounds that the case is likely to settle. On May 23, 2006, a motion for Preliminary Approval of Proposed Settlement was filed.

In October 2004, the action was transferred from the U.S. District Court for the Northern District of Illinois to the District of Massachusetts.

The original Complaint alleges that defendants Chief Executive Officer and Chairman of the Board of Directors, and Chief Financial Officer and Executive Vice President violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between November 12, 2001, and February 18, 2003, thereby artificially inflating the price of Divine securities. Throughout the Class Period, as alleged in the Complaint, defendants failed to disclose and misrepresented the following material adverse facts: (i) Divine was engaged in a scheme of inflating its revenues by approximately $65 million by instructing employees of its wholly-owned subsidiary, RoweCom, to offer discounts to library customers that paid cash in advance - months before payments were due to publishers - even though Divine had no plan to pay its obligations to publishers, (ii) Divine was fraudulently diverting nearly $74 million from RoweCom's operations, (iii) Divine lacked adequate financial and internal controls with respect to its RoweCom operations, and (iv) as a result of the foregoing, Divine lacked a reasonable basis to project profitability by year-end or an ability to maintain its operations without bankruptcy protections. The Class Period ends on February 18, 2003. On that date, Divine announced that "despite efforts over the past several months to minimize operating expenses and various liabilities, its board of directors has determined that it must seek alternatives to protect the value and viability of its operations. As a result, Divine has engaged Broadview International LLC as advisors to assist in exploring strategic options, which may include asset divestitures, comparable transactions, and/or the filing of a voluntary petition under Chapter 11 of the United States Bankruptcy Code." In response to this announcement, the price of Divine stock declined precipitously. During the Class Period, Divine completed two acquisitions, among numerous others - acquiring Viant Corporation and Delano Technology Corporation - using its common stock as currency.

INDUSTRY CLASSIFICATION:
SIC Code: 7389
Sector: Services
Industry: Business Services

COMPANY/ISSUER NAME:	divine, Inc.
COMPANY/ISSUER TICKER:	DVINQ
COMPANY WEBSITE:	http://www.divine.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Bobbitt, et al. v. Filipowski et al.

COURT: N.D. Illinois	DOCKET NUMBER: 03-CV-3599
JUDGE NAME: Hon. Samuel Der-Yeghiayan
DATE FILED: 5/27/2003	SOURCE: Business Wires
CLASS PERIOD START: 11/12/2001	CLASS PERIOD END: 2/14/2003
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Berger & Montague PC 1622 Locust Street, Philadelphia, PA, 19103 (voice) 800.424.6690, (fax) 215.875.4604, investorprotect@bm.net Cauley Geller Bowman Coates & Rudman, LLP (New York) 200 Broadhollow, Suite 406, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, Kirby McInerney & Squire LLP 830 Third Avenue 10th Floor, New York Ave, NY, 10022 (voice) 212.317.2300, (fax) , Law Offices of Charles J. Piven, P.A. World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202 (voice) 410.332.0030, (fax) , pivenlaw@erols.com Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA) 600 West Broadway, 1800 One America Plaza, San Diego, CA, 92101 (voice) 800.449.4900, (fax) , support@milberg.com Murray, Frank & Sailer LLP 3181 South 27th Street, Milwaukee, WI, 53215 (voice) 866.264.3995, (fax) 414.482.8001, info@murrayfrank.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com Stull, Stull & Brody (New York) 6 East 45th Street, New York, NY, 10017 (voice) 310.209.2468, (fax) 310.209.2087, SSBNY@aol.com Wechsler Harwood LLP 488 Madison Avenue 8th Floor, New York, NY, 10022 (voice) 212.935.7400, (fax) , info@whhf.com Weiss & Yourman (New York, NY) The French Building, 551 Fifth Ave., Suite 1600, New York, NY, 10126 (voice) 212.682.3025, (fax) 212.682.3010, info@wyca.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 10

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint For Violations Of Federal Securities Laws
Type: Complaint		Date on the document: 05/27/2003
Consolidated Class Action Complaint For Violation Of Federal Securities Laws
Type: Complaint		Date on the document: 12/15/2003
U.S. District Court Civil Docket
Type: Docket		Date on the document: 11/8/2004

REFERENCE COMPLAINT

Bobbitt, et al. v. Filipowski et al.

COURT: D. Massachusetts	DOCKET NUMBER: 04-CV-12263
JUDGE NAME: Hon. Patti B. Saris
DATE FILED: 3/8/2005	SOURCE: Business Wires
CLASS PERIOD START: 9/17/2001	CLASS PERIOD END: 2/14/2003
TYPE OF COMPLAINT: Second Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville) 200 Broadhollow, Suite 406, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, info@lerachlaw.com Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego) 655 West Broadway, Suite 1900, San Diego, CA, 92101 (voice) 619.231.1058, (fax) 619.231.7423, Stull, Stull & Brody (New York) 6 East 45th Street, New York, NY, 10017 (voice) 310.209.2468, (fax) 310.209.2087, SSBNY@aol.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE REFERENCE COMPLAINT
Second Consolidated Class Action Complaint For Violations Of The Federal Securities Law (Part 1)
Type: Complaint		Date on the document: 03/08/2005
Second Consolidated Class Action Complaint For Violations Of The Federal Securities Law (Part 2)
Type: Complaint		Date on the document: 03/08/2005
Second Consolidated Class Action Complaint For Violations Of The Federal Securities Law (Part 3)
Type: Complaint		Date on the document: 03/08/2005
Plaintiffs’ Assented-To Moton For Preliminary Approval Of Proposed Settlement
Type: Motion		Date on the document: 05/23/2006
Order Preliminarily Approving Settlement And Providing For Notice
Type: Order		Date on the document: 08/25/2006
U.S. District Court Civil Docket
Type: Docket		Date on the document: 08/25/2006
Re: Bobbit v. Filopowski
Type: Other		Date on the document: 4/2/2007
Re: Bobbit v. Filipowski
Type: Other		Date on the document: 11/1/2007

OTHER DOCUMENTS

Case Name and/or Number:
Type: Other		Date on the document:

Case Name and/or Number:
Type: Other		Date on the document:
Class Action Complaint for Violations of the Federal Securities Law
Case Name and/or Number: 03-C-4100
Type: Complaint		Date on the document: 06/16/2003

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