Collins & Aikman Corporation - Securities Class Action

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Stanford Law School

Collins & Aikman Corporation Summary: The original complaint charges Collins & Aikman and certain of its current and former officers with violations of the Securities Exchange Act of 1934. More specifically, the complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company improperly accounted for certain supplier rebates; (2) that the Company's financial statements required net adjustments of approximately $10 - $12 million; (3) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a consequence of the foregoing, the Company's net income and financial results were materially overstated at all relevant times.

The complaint further alleges that on or around March 17, 2005, Collins & Aikman announced that after the review of vendor rebates covered an aggregate of approximately $88 million of vendor transactions in fiscal years 2002 through 2004, the company's management believes that net adjustments of approximately $10 - $12 million are required primarily occurring during fiscal 2004. News of this shocked the market. Shares of Collins & Aikman fell $0.39 per share or 23.93 percent, on March 17, 2005, to close at $1.24 per share.

On May 17, 2005, Collins & Aikman filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code and is no longer named as a defendant. On June 8, 2005, plaintiff Joseph Bruno, the plaintiff in the first filed complaint, filed a Notice of Voluntary Dismissal. Similar cases that were also filed in the U.S. District Court for the Eastern District of Michigan were also voluntarily dismissed. Additional complaints were filed against certain officers and/or directors of Collins & Aikman Corporation in the U.S. District Court for the Southern District of New York.

As summarized by the lead counsel’s website, on June 6, 2005, motions were made to consolidate the various cases and appoint lead plaintiff and lead counsel. On December 1, 2005, the court consolidated the cases. A consolidated complaint was filed on January 13, 2006. On March 2, 2006, defendants filed a motion to transfer the case to the Eastern District of Michigan. Plaintiff filed an opposition on March 17, 2006. Defendants' filed their motions to dismiss on March 18, 2006. Plaintiff filed an opposition on April 21, 2006, and defendants replied on May 5, 2006. On July 10, 2006, Judge Mukasey of the Southern District of New York officially appointed Wolf Haldenstein lead counsel. On July 12, 2006, he granted defendants' motion for transfer and ordered the clerk to the transfer the case to the Eastern District of Michigan. Because of the transfer, Judge Mukasey declined to rule on defendants' pending motions to dismiss.

On October 19, 2006, on of the individual defendants was voluntarily dismissed with prejudice. On January 11, 2007, defendants’ pending motion to dismiss were denied as moot. On May 4, 2007, a Second Amended Consolidated Class Action Complaint was filed and the defendants responded by filing several motions to dismiss the Second Amended Consolidated Class Action Complaint on July 31, 2007. On August 6, 2007, the Court entered the Order granting the motion to dismiss the Second Consolidated Class Action Complaint as to one of the individual defendants. On March 19, 2008, U.S. District Arthur J. Tarnow denied two of defendants’ motions to dismiss and granted in part and denied in part one of the defendant’s motion to dismiss. The parties have since been engaged in settlement conferences and discovery.

On February 17, 2010, a motion for preliminary approval of settlement was filed. According to the Stipulation and Agreement of Settlement, the proposed settlement is in the amount of $12,262,500. On February 24, 2010, the settlement was preliminarily approved. The Settlement Fairness Hearing is scheduled to be held before the Court on June 7, 2010.

On June 7, 2010, the settlement fairness hearing was held and the settlement was approved by District Judge Gerald E. Rosen. The case is now dismissed with prejudice.

INDUSTRY CLASSIFICATION:
SIC Code: 3714
Sector: Consumer Cyclical
Industry: Auto & Truck Parts

COMPANY/ISSUER NAME:	Collins & Aikman Corporation
COMPANY/ISSUER TICKER:	CKC
COMPANY WEBSITE:	http://www.colaik.com/

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Joseph Bruno, et al. v. Collins & Aikman Corporation, et al.

COURT: E.D. Michigan	DOCKET NUMBER: 05-CV-71325
JUDGE NAME: Hon. Marianne O. Battani
DATE FILED: 04/05/2005	SOURCE: Notice of Filing
CLASS PERIOD START: 05/06/2004	CLASS PERIOD END: 03/17/2005
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Baron & Budd, P.C. (Dallas) 3102 Oak Lawn Avenue, Suite 1100, Dallas, TX, 75219 (voice) 800-946-9646, (fax) , info@baronbudd.com Berman DeValerio Pease Tabacco Burt & Pucillo (MA) One Liberty Square, Boston, MA, 2109 (voice) 617.542.8300, (fax) 617.230.0903, info@bermanesq.com Federman & Sherwood (Oklahoma City) 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102 (voice) 405-235-1560, (fax) , wfederman@aol.com Law Offices of Brian M. Felgoise, P.C. Esquire at 261 Old York Road, Suite 423, Jenkintown, PA, 19046 (voice) 215.886.1900, (fax) , securitiesfraud@comcast.net 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 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 Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr, New York, NY, 10016 (voice) 212.682.1818, (fax) 212.682.1892, email@murrayfrank.com Schatz & Nobel, P.C. 330 Main Street, Hartford, CT, 06106 (voice) 800.797.5499, (fax) 860.493.6290, sn06106@AOL.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com Scott & Scott LLC (Connecticut) P.O. Box 192, 108 Norwich Avenue, Colchester, CT, 06415 (voice) 860.537.5537, (fax) 860.537.4432, scottlaw@scott-scott.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 Wolf Haldenstein Adler Freeman & Herz LLP (New York) 270 Madison Avenue, New York, NY, 10016 (voice) 212.545.4600, (fax) 212.686.0114, newyork@whafh.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 12

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint - Jury Trial Demanded
Type: Complaint		Date on the document: 04/05/2005
Joseph Bruno's Notice Of Voluntary Dismissal Without Prejudice
Type: Notice		Date on the document: 06/08/2005
U.S. District Court Civil Docket
Type: Docket		Date on the document: 06/08/2005

REFERENCE COMPLAINT

In Re Collins & Aikman Corporation Securities Litigation

COURT: E.D. Michigan	DOCKET NUMBER: 06-CV-13555
JUDGE NAME: Hon. Arthur J. Tarnow
DATE FILED: 05/04/2007	SOURCE: Docket
CLASS PERIOD START: 08/06/2002	CLASS PERIOD END: 05/17/2005
TYPE OF COMPLAINT: Second Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Wolf Haldenstein Adler Freeman & Herz LLP (New York) 270 Madison Avenue, New York, NY, 10016 (voice) 212.545.4600, (fax) 212.686.0114, newyork@whafh.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Stipulation For The Entry Of An Order Of Voluntary Dismissal Of Jerry L. Mosingo
Type: Order		Date on the document: 10/19/2006
Order Denying Defendant’s Motion To Dismiss [3] As Moot
Type: Order		Date on the document: 01/11/2007
Second Amended Consolidated Class Action Complaint
Type: Complaint		Date on the document: 05/04/2007
Order Denying Motions To Dismiss [32 In 06-13555, 33, 35; 41 In 07-10542, 43, 45, 48, 51]; Granting Motions To Dismiss [36 In 07-10542, 37,46]; Denying In Part And Granting In Part Motions To Dismiss [34 In 06-13555; 40 In 07-10542, 42, 50]; And Denying As Moot Motion To Dismiss [47]
Type: Order		Date on the document: 03/19/2008
Order On Defendant Bryce M. Koth's Motion To Dismiss Second Amended Complaint
Type: Order		Date on the document: 08/06/2008
Lead Plaintiff's Motion For Preliminary Approval Of Settlement, Certification Of Settlement Class And Approval Of notice To The Mainstay Class
Type: Settlement		Date on the document: 02/17/2010
Preliminary Order For Notice And Hearing In Connection With Settlement Proceedings
Type: Order		Date on the document: 02/24/2010
Order and Final Judgment
Type: Order		Date on the document: 06/10/2010
Order Approving Lead Plaintiff’s Plan Of Allocation And Epstein’s Counsel’s Request For Attorneys' Fees And Expenses
Type: Order Approving AF&E		Date on the document: 06/10/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 10/07/2010

OTHER DOCUMENTS
Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Gersh Korsinsky, et al. v. Collins & Aikman Corp., et al.
Type: Complaint		Date on the document: 04/08/2005
Class Action Complaint For Violations Of Federal Securities Laws
Case Name and/or Number: Hanna Kleinpeter-Fleck, et all. v. Collins & Aikman Corporation, et al.
Type: Complaint		Date on the document: 04/13/2005
Class Action Complaint for Violations of the Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: E.J. Egleston, et al. v. Collins & Aikman Corporation, et al.
Type: Complaint		Date on the document: 05/23/2005
Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Massimo Gariddi, et al. v. Collins & Aikman Corporation, et al.
Type: Complaint		Date on the document: 06/01/2005
Class Action Complaint For Violations Of Federal Securities Laws
Case Name and/or Number: Massimo Garridi, et all. v. Collins & Aikman Corporation, et al.
Type: Complaint		Date on the document: 06/01/2005
U.S. District Court Civil Docket
Case Name and/or Number: Korsinsky, et al. v. Collins & Aikman Corporation, et al.
Type: Docket		Date on the document: 06/16/2005
Consolidated Class Action Complaint [USDC for the SDNY, 05-CV-3791]
Case Name and/or Number: In Re: Collins & Aikman Corporation Securities Litigation
Type: Complaint		Date on the document: 01/19/2006
Opinion And Order [USDC for the SDNY, 05-CV-3791]
Case Name and/or Number: In Re: Collins & Aikman Corporation Securities Litigation
Type: Order		Date on the document: 07/11/2006
U.S. District Court Civil Docket [USDC for the SDNY, 05-CV-3791]
Case Name and/or Number: In Re Collins & Aikman Corporation Securities Litigation
Type: Docket		Date on the document: 08/15/2006

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